Please ensure Javascript is enabled for purposes of website accessibility

Why Fresenius Medical Care’s Stock Fell 24% in October

By Demitri Kalogeropoulos – Nov 12, 2018 at 4:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors sold the stock off in response to surprisingly weak third-quarter results.

What happened

Dialysis product and services specialist Fresenius Medical Care (FMS -4.38%) trailed the market by a wide margin last month, shedding 24% compared to a 7% slump in the S&P 500, according to data provided by S&P Global Market Intelligence.

^SPX Chart

^SPX data by YCharts.

The decline sent shares well below the broader market, down 25% so far in 2018 compared to a 2.5% uptick in the S&P 500.

So what

Investors weren't happy with the company's preliminary third-quarter report, published on Oct. 16, which showed a surprising drop in both revenue and profits. Executives blamed "weaker-than-expected" dialysis services demand in the key U.S. market for most of the shortfall.

A patient receiving dialysis treatment.

Image source: Getty Images.

Now what

CEO Rice Powell and his executive team now believe sales will inch up by between 2% and 3% for the full year compared to their earlier target range of between 5% and 7%. Net income will outpace that growth but will also come in lower than initially expected. Looking further out, shareholders are hoping that selling conditions improve in the U.S. over time and that the company's acquisition of NxStage Medical helps put Fresenius Medical Care back in a growth posture in 2019.

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool recommends NxStage Medical. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Fresenius Medical Care AG & Co. KGaA Stock Quote
Fresenius Medical Care AG & Co. KGaA
$14.39 (-4.38%) $0.66

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.