Fresenius SE rose the most in eight months after boosting its full-year sales forecast and as investors saw reassuring results in North America for Fresenius Medical Care AG, the dialysis provider it controls.
Revenue will rise by 14 percent to 16 percent this year, excluding currency swings, the Bad Homburg, Germany-based company said today. That compares with an increase of 12 percent to 15 percent forecast in February. Adjusted second-quarter earnings before interest and taxes were 760 million euros ($1.02 billion), beating the 747 million-euro average estimate of four analysts surveyed by Bloomberg.
Most heartening for investors may have been Fresenius Medical Care’s progress in North America, said Martin Brunninger, an analyst for Jefferies International Ltd. in London. Chief Executive Officer Rice Powell has said the dialysis company struggled last year to meet its targets as the U.S. government cut health spending. Fresenius owns about 30 percent of the unit, which is also based in Bad Homburg.
“All eyes are usually on North America,” Brunninger said by telephone. “If they do well there, I think people are relieved.” He rates Fresenius Medical Care underperform and recommends buying its parent company.
Fresenius SE shares closed up 3.7 percent to 111.90 euros in Frankfurt trading today, after jumping as much as 7 percent earlier in the session. It’s the steepest single-day increase since Nov. 25. Fresenius Medical Care rose 2.1 percent.
Fresenius Medical Care today reiterated its forecast for net income of $1 billion to $1.05 billion this year. The company said North American sales grew by 5 percent in the first half to $4.9 billion. Fresenius SE also confirmed its profit forecast, saying it expects an increase in net income of 2 percent to 5 percent in constant-currency terms.
“People want a reason to buy the stock again,” Lisa Bedell Clive, a London-based analyst for Sanford C. Bernstein & Co., said by telephone about the dialysis provider. “A decent second quarter was enough.” She rates the shares outperform.