Fresenius Medical Care
(
FMS
), the world's largest dialysis company, posted first-quarter 2012
earnings per share of 80 cents, beating the Zacks Consensus
Estimate of 76 cents and the year-ago earnings of 73 cents per
share. Adjusted income excludes gain from investments.
Net income (attributable to the company) shot up 68% year over
year to $370 million on the back of one-time income.
Revenue Analysis
Net revenues rose 9% (up 10% at constant currency) year over
year to $3,249 million, but missed the Zacks Consensus Estimate of
$3,266 million. Organic revenue growth was 3% on a global
basis.
Geographically, revenues from the North American markets moved
up 9% to $2,105 million in the first quarter while overseas
revenues increased 8% (up 12% at constant currency) to $1,136
million.
Dialysis services revenues increased 11% year over year to
$2,478 million with domestic and international sales rising 11%
each, to $1,918 million and $560 million, respectively. Average
revenue per treatment for domestic clinics increased to $353 from
$348 a year ago.
Consolidated dialysis product revenues were up 3% year over year
to $771 million. Dialysis product sales in domestic markets dropped
4% to $187 million mainly on account of reduced prices for
pharmaceuticals. International dialysis product sales rose 4% to
$576 million, boosted by higher sales of dialysis machines.
Operating Statistics
Fresenius operated a network of 3,119 dialysis clinics (up 13%
year over year) across North America and the overseas markets, as
of March 31, 2012. It has provided dialysis treatment to 253,041
patients (up 17% year over year) worldwide as of March 31, 2012.
During the first quarter, the company provided roughly 9.21 million
dialysis treatments globally, up 13% year over year.
Margins
Operating margin rose to 15.5% from 14.9% a year ago. In North
America, operating margin climbed to 16.5% from 16.2%. Operating
margin for overseas markets increased to 17.2% from 16.2% helped by
favorable currency exchange movements.
Cash Flows
Fresenius generated operating cash flows of $481 million
(roughly 14.8% of sales) in the first quarter, a 174%
year-over-year surge. The company spent $122 million on capital
expenditure in the quarter. Free cash flow, prior to acquisitions,
was $359 million versus $62 million a year ago. The company
expended $1,526 million for investments and acquisitions. Free cash
flow, post acquisitions, divestures and investments, was $(1167)
million compared with $(277) million in the prior-year period.
Guidance
Fresenius reiterated its forecast for 2012. The company
continues to envision sales of roughly $14 billion for 2012. Net
income for the year is expected at $1.3 billion and net income
(attributable to shareholders) is pegged at $1.14 billion. Net
income excludes gain on investments of about $127 million in the
first quarter. The company expects capital expenditure of roughly
$700 million and plans to spend around $1.8 billion on
acquisitions.
Fresenius is the largest provider of products and services for
patients undergoing dialysis treatment on the planet. The company's
principal competitor in the U.S. is
DaVita Inc.
(
DVA
), which provides dialysis services for patients suffering from
chronic kidney failure or end stage renal disease.
DAVITA INC (DVA): Free Stock Analysis Report
FRESENIUS MED (FMS): Free Stock Analysis Report
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