Fresenius Medical Drops After Again Cutting FY18 Outlook

Shares of Fresenius Medical Care (FMS) dropped in early trading after the company cut its outlook for fiscal 2018.

LOWERED OUTLOOK: Fresenius Medical Care, a provider of dialysis products and services, now sees FY18 net income up 11%-12% at constant currency versus its previous outlook of 13%-15% growth. Adjusted net income is now seen up 2%-3% at constant currency versus its prior 7%-9% growth view.

Revenue growth on a comparable basis for the fiscal year is now seen up 2%-3% at constant currency due to weaker than expected growth in the Health Care Services business in North America and the "difficult" economic environment in certain emerging countries, the company said. Previously, Fresenius forecast FY revenue growth of 5%-7%. The company said it was adjusting its outlook for the year as the business development in the third quarter was "below the company's expectations". The updated targets exclude the effects of the planned acquisition of NxStage Medical (NXTM) and effects related to divestitures of Care Coordination activities and do not include the contributions to the opposition to the ballot initiatives in the U.S., it added.

WHAT'S NOTABLE: This is the second time Fresenius has lowered its fiscal year outlook. In April, the company cut its revenue growth outlook "mainly driven by the change in calcimimetic drugs". 

PRICE ACTION: In morning trading, shares of Fresenius Medical Care dropped nearly 17% to $41.46. Shares of NxStage Medical declined 2.5% to $27.50.

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