German healthcare firm Fresenius SE & Co. KGaA (FSNUF.PK) on Wednesday reported higher profit for its third quarter, above estimates, as improved margins helped offset a decline in sales. The group's publicly-listed unit Fresenius Medical Care AG & Co. KGaA (FMS) also posted higher profit in the quarter boosted by international sales strength, but missed Wall Street view. Looking ahead, Fresenius SE lifted its full-year earnings growth forecast, while the medical care unit backed its outlook.
Third-quarter net income attributable to Fresenius SE was 228 million euros or 1.38 euros per share, higher than prior year's 195 million euros or 1.19 euros per share.
Adjusted earnings, which excluded non-cash charges, were 202 million euros or 1.22 euros per share, compared to 193 million euros or 1.18 euros per share a year ago. Operating income, or EBIT, was flat year-over-year at 655 million euros.
Analysts polled by dpa-AFX, on average, expected the company to earn 200 million euros in adjusted net income and 661.3 million euros in EBIT.
EBIT, as percentage of total sales, also improved from last year for the parent company.
Fresenius SE's net sales for the quarter, meanwhile, dropped to 4.09 billion euros from prior year's 4.14 billion euros and missed dpa-AFX polled analysts' sales estimate of 4.21 billion euros.
Division-wise, revenues of Kabi, a provider of generic drugs and infusion therapies, were 979 million euros, nearly flat with last year's 978 million euros. Hospital operator Helios' sales grew 6 percent to 657 million euros. Meanwhile, sales of Vamed, which is engaged in international projects and services for hospitals, dropped 7 percent to 167 million euros. Analysts polled by dpa-AFX projected sales of 1.01 billion for Kabi, 657.3 million euros for Helios and 189.7 million euros for Vamed.
The group's publicly-listed medical care unit, Fresenius Medical Care, which focuses on dialysis care, reported that third-quarter attributable net income grew 12.7 percent to $279.25 million and earnings per share rose 11.9 percent to $0.92.
Analysts polled by Thomson Reuters expected earnings of $0.95 per share for the quarter. Analysts' estimates typically exclude one-time items.
Fresenius Medical Care generated sales of 2.30 billion euros, 3 percent lower than last year. In US dollar terms, net revenue grew 6 percent to $3.24 billion from prior year's $3.06, but missed analysts' consensus estimate of $3.35 billion.
Organic revenue growth was 1 percent. The division's North American revenues edged down 1 percent, but international revenues climbed 20 percent.
Looking ahead, Fresenius SE CEO Ulf Mark Schneider said the company has improved its fiscal 2011 adjusted earnings outlook and now expects to achieve the upper half of 15 percent to 18 percent growth target range in constant currency.
Based on the sales growth of the first three quarters, the parent company now expects to increase sales by about 6 percent in constant currency.
Meanwhile, Fresenius Medical Care confirmed its full-year sales and earnings outlook, and continues to expect net income of between $1.07 billion and $1.09 billion and revenue to grow to above $13 billion. Analysts estimate revenues of $13.05 billion for 2011.
Fresenius SE's shares closed Tuesday's trading at 69.49 euros, down 2.55 percent on Frankfurt's Xetra.
Fresenius Medical Care closed Tuesday's trading at 50.40 euros, down 2.37 euros or 4.49 percent on Frankfurt's Xetra, and at $69.39, down $3.31 or 4.55 percent in the U.S.
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