FMS Stock Rises as Q2 Earnings Beat Estimates, Revenues Gain Y/Y

Core Insights - Fresenius Medical Care AG & Co. (FMS) reported second-quarter 2025 adjusted earnings per share (EPS) of 52 cents, exceeding the Zacks Consensus Estimate by 4% and reflecting a year-over-year increase of 36.8% [1][7] - Revenues reached $5.44 billion (EUR 4,792 million), surpassing the Zacks Consensus Estimate by 1.6%, with a year-over-year growth of 1% and 5% at constant currency [2][7] Revenue Details - The revenue growth was impacted by divestitures as part of the portfolio optimization plan, which negatively affected revenue by EUR 6 million in the second quarter [3] - Full-year top-line numbers are expected to reflect a 100 basis points negative impact due to the portfolio optimization plan in 2024 [3] Segment Performance - Fresenius Medical has implemented a new operating model in 2024, reporting under two segments: Care Delivery and Care Enablement [4] - Care Delivery segment revenues decreased by 3% year-over-year but increased by 1% at constant currency and 4% organically [5] - Care Enablement segment revenues decreased by 1% year-over-year but gained 3% at constant currency and organically [9] Margin Analysis - Gross profit improved by 4.2% year-over-year, with gross margin expanding by 90 basis points to 25.4% [10] - Adjusted operating income increased by 9.2% from the prior-year quarter, with the adjusted operating margin expanding by 80 basis points to 9.9% [10] 2025 Guidance - Fresenius Medical expects low-single-digit revenue growth and high-teens to high-twenties percent growth in operating income for 2025 [11] Strategic Initiatives - The FME25 transformation program delivered EUR 58 million in additional sustainable savings, with a target of around EUR 180 million in additional annual savings by the end of 2027 [13] - Continued divestment of non-core and dilutive assets is seen as a positive move to focus on core categories and enhance cash resources [14]