Fresenius Medical Care AG FMS reported second-quarter 2026 adjusted earnings per share (EPS) of 66 cents, which increased 28% year over year at constant currency (cc), supported by stronger Care Delivery profitability and share repurchases.
FMS Posts Solid Organic Revenue Growth
Revenues rose 0.9% year over year to $5.65 billion (EUR 4,861 million) but missed the Zacks Consensus Estimate of $5.72 billion by 1.1%. Organic revenue growth was 5%, while U.S. same-market treatment growth declined 0.9%. Revenues were up 4% at cc.
Revenues increased 1.4% year over year in terms of euro. Revenues grew 3.6% at constant currency, with unfavorable foreign exchange movements affecting all three operating segments. Divestitures reduced growth by about 50 basis points.
Organic growth reflected favorable reimbursement and rate developments, increased value-based care membership and accelerating 5008X CAREsystem sales. These gains were partly offset by lower U.S. treatment volumes and regulatory pressures in China.
Segmental Details
Care Delivery
Care Delivery revenues increased 2.9% year over year. The metric rose 5.5% at constant currency and 7.4% organically. Divestitures reduced the segment’s revenue growth by roughly 90 basis points.
U.S. revenues advanced 3%, aided by TDAPA reimbursement, favorable rates and revenue-cycle management initiatives. U.S. revenues gained 6% at cc and 7% organically. However, U.S. same-market treatment growth fell 0.9% as the company captured fewer patient referrals than expected. International revenues rose 3%, while same-market treatment growth was 0.8%. Revenues were up 5% at cc and 11% organically in international markets.
Care Delivery’s adjusted operating income surged 39.5%, with its margin expanding to 15.1% from 11.2%. Favorable rates, clinic closures, revenue-cycle improvements and FME25+ savings more than offset lower U.S. treatment volumes. TDAPA reimbursement produced an approximately EUR 18 million year-over-year earnings benefit.
Care Enablement
Care Enablement revenues grew 2%, driven by pricing, volumes outside China and 5008X sales. Revenues were up 3% at cc as well as organically.
Care Enablement’s adjusted operating income declined 5.5% as China-related regulatory pressure and inflationary costs offset business growth.
Value-Based Care
Value-Based Care revenues increased 6% at constant currency (cc) and 9% on an organic basis. Growth reflected more member months and favorable premium rates, partly offset by a contract’s shift to a different risk arrangement and accounting treatment.
The segment reported adjusted operating income of EUR 18 million compared to an adjusted operating loss of EUR 9 million in the year-ago period.
FMS Benefits From Stronger Profitability
In the quarter under review, Fresenius Medical’s gross profit increased 7.8% year over year. The gross margin expanded approximately 160 basis points (bps) to 27%.
Selling, general and administrative expenses decreased 7.1% on a reported basis. Research and development expenses increased 4% year over year.
Adjusted operating income increased 19.6% and advanced 23.5% at constant currency. The adjusted operating margin expanded 180 basis points to 11.7%, reflecting contributions from Care Delivery and Value-Based Care.
FMS Reaffirms Its 2026 Outlook
Fresenius Medical continues to expect broadly flat revenue growth for 2026 at constant currency. Adjusted operating income is expected to range from a mid-single-digit decline to a mid-single-digit increase.
Management expects TDAPA reimbursement to become a substantial earnings headwind during the second half. However, the projected full-year TDAPA headwind was reduced to about EUR 50 million from the prior expectation of EUR 100 million. Care Enablement margins are expected to improve in the second half, while Value-Based Care is anticipated to breakeven this year.
Wrapping Up
Fresenius Medical exited the second quarter with revenues missing the Zacks Consensus Estimate. However, adjusted earnings increased year over year, supported by stronger operating performance, margin expansion and the company’s share repurchase program.
Shares of FMS remained flat during after-hours trading following the earnings release. The company’s share price improvement of 0.8% so far this year has outperformed the industry’s 10.4% decline but underperformed the S&P 500 Index’s 11.3% gain.
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Fresenius Medical Care maintained solid operational momentum, delivering 5% organic revenue growth and 23% adjusted operating income growth at constant currency. Profitability benefited from FME25+ savings, favorable reimbursement and rate developments, clinic optimization and improved revenue-cycle management.
U.S. treatment volumes remained under pressure, with same-market treatment growth declining 0.9% due to weaker referral capture. China also weighed on Care Enablement through volume-based procurement and stricter tender requirements, while higher raw material and logistics costs created additional pressure.
As FMS continued to execute its FME Reignite strategy, the rollout of the 5008X gained momentum. By late July, 227 clinics across 23 states had been converted, representing 10% of the company’s U.S. machine base. More than 600,000 treatments had been performed with the system, including about 170,000 hemodiafiltration treatments and more than 100,000 high-volume hemodiafiltration treatments.
The FME25+ transformation program delivered EUR 67 million in sustainable savings during the quarter. Fresenius Medical completed its planned optimization of the U.S. clinic network by exiting about 100 underperforming clinics.
FMS’ Zacks Rank & Key Picks
Fresenius Medical currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader medical space are West Pharmaceutical WST, McKesson MCK and Cardinal Health CAH, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
West Pharmaceutical reported second-quarter 2026 adjusted earnings per share (EPS) of $2.37, which beat the Zacks Consensus Estimate by 13.9%. Revenues of $872.3 million surpassed the Zacks Consensus Estimate by 4.2%.
West Pharmaceutical has an estimated long-term earnings growth rate of 16%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 17.4%.
McKesson reported a fourth-quarter fiscal 2026 adjusted EPS of $11.69, which beat the Zacks Consensus Estimate by 1.1%. Revenues of $96.3 billion missed the Zacks Consensus Estimate by 5.5%.
McKesson has an estimated long-term earnings growth rate of 13.7%. MCK’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.1%.
Cardinal Health reported a third-quarter fiscal 2026 adjusted EPS of $3.17, which beat the Zacks Consensus Estimate by 13.2%. Revenues of $60.94 billion missed the Zacks Consensus Estimate by 2.3%.
Cardinal Health has an estimated long-term earnings growth rate of 17%. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 10.3%.
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Fresenius Medical Care AG & Co. KGaA (FMS): Free Stock Analysis Report
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West Pharmaceutical Services, Inc. (WST): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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