By Maria Rugamer, Patricia Weiss and Bartosz Dabrowski
(Reuters) -Fresenius Medical Care posted a stronger-than-expected quarterly operating income on Tuesday, helped by cost savings and portfolio measures, but kept its outlook unchanged amid lingering effects from elevated flu mortality among patients.
The dialysis specialist, which makes a bulk of its revenue in the United States, reported an operating income excluding special items of 574 million euros ($669 million) for the third quarter, beating a company-provided consensus of 550 million euros.
Elevated mortality from an unusually severe flu season in the U.S. had led to disappointing second-quarter results and continues to be a drag, CEO Helen Giza told Reuters, even though the past quarter was “as normal as you get”.
“You’re still dealing with the annualization of the patients lost in the early part of the year,” she said.
The Germany-based company is on track to meet its 2025 targets after delivering 174 million euros in savings from its cost-cutting programme in the first nine months of the year, just shy of the 180 million euro full-year goal, Giza said in a statement.
The strategy, which aims to unlock up to 1.05 billion euros in annual savings by 2027, helped the group lift its adjusted operating income by 28% in the third quarter.
Giza also said she was confident FMC would return to a pre-pandemic growth rate of 2%, but did not provide a timeline for that.
But despite what J.P. Morgan analyst David Adlington described as “potentially decent” results, FMC’s shares fell nearly 6.5% and were on track for their worst day since early March as of 1000 GMT.
The market is expected to remain cautious due to the risk of another significant share sale by FMC’s former parent Fresenius, Adlington added.
FMC kicked off a 1-billion-euro share buyback programme in August and had repurchased 3.6 million shares for 151 million euros by the end of the third quarter.
($1 = 0.8575 euros)
(Reporting by Maria Rugamer and Bartosz Dabrowski in Gdansk, Patricia Weiss in Frankfurt, editing by Milla Nissi-Prussak)
