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UPDATE 1-Fresenius Medical profit below consensus on U.S. costs
April 30, 2013 / 7:30 AM / 5 years ago

UPDATE 1-Fresenius Medical profit below consensus on U.S. costs

* Q1 net income down at $225 mln vs poll avg $256

* Hit by U.S. wages, devaluation of Venezuelan Bolivar

* Shares down 4 pct, worst DAX decliner

FRANKFURT, April 30 (Reuters) - First-quarter net income at Fresenius Medical Care (FMC), the world’s largest dialysis provider, dropped more than expected to $225 million on higher costs in the United States, its most important market.

The 12 percent miss from an average analyst estimate of $256 million for net income marks a rare disappointment for analysts, who tend to accurately forecast FMC’s steady gains in income from dialysis services and devices, which are not dependent on the business cycle.

LBBW analyst Timo Kuerschner pointed to higher wages in the United States and the effect of a sharply lower Venezuelan bolivar on FMC’s emerging markets business as the main effects not factored in by the market.

Shares in FMC dropped 4 percent after the open, the biggest decline in the German blue-chip index DAX, which was down 1 percent.

The company, however, continues to target 2013 net income of between $1.1-$1.2 billion, it said on Tuesday, in line with analyst expectations.

“We are confident of meeting our guidance range for the full year, although we are not completely satisfied with our growth internationally in the first quarter of 2013,” FMC Chief Executive Rice Powell said.

German diversified healthcare group Fresenius SE, which controls FMC, posted first-quarter adjusted net income slightly below market expectations.

Quarterly adjusted net income gained 12 percent to 224 million euros ($292 million), it said on Tuesday, lower than the consensus estimate of 231 million euros.

Fresenius confirmed it saw 2013 sales growth of 7-10 percent and adjusted net income growth of 7-12 percent, both adjusted for currency swings.

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