Higher Revenues in First Quarter 2015

The two largest dialysis firms in the US reported higher revenues recently. Fresenius had a first quarter revenue of $3.96 billion, which was an increase of 11 percent, but its dialysis product revenue of $778 million remained unchanged compared with the first quarter of 2014, the company reported. Zack’s online investment research experts had predicted total revenue of $3.92 billion, or about $40 million less for the enterprise. Fresenius reported that “organic growth” through good performances from all of its regions worldwide was positive during the quarter, outpacing analysts’ expectations.

Fresenius saw North America “net dialysis care revenue” increase by 4 percent to $2.14 billion. Dialysis product revenue increased by 4 percent to $200 million compared with the first quarter of 2014. Fresenius North America overall revenues rose 16% year over year to $2.77 billion.

The company reaffirmed its guidance for 2015: it expects revenues to grow at 5 percent to 7 percent. Zacks reported that a strong performance in North America and particularly in the Asia Pacific, “coupled with an encouraging pharma business in North America is expected to help the company, going forward.” However, declining margins remain a potential problem, Zacks said.

With business in more than 50 countries around the world, Fresenius has approximately 60,000 employees in North America, according to its US web site. Fresenius “will lie in wait for an overheated healthcare deal market to cool down” before making additional larger acquisitions, CEO Ulf Schneider said.

DaVita Kidney Care, based in Denver, announced on May 4, 2015, net revenue of $3.3 billion for the first quarter of 2015, an increase of 10 percent compared with $3 billion the same three months in 2014.

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While revenues were higher, net income was not. DaVita HealthCare Partners’ first-quarter income performance was a net loss of $111 million compared with a year ago, when the kidney care and medical group operator posted net income of $183.3 million.

As of March 31, 2015, the company had provided dialysis services to approximately 181,000 patients at 2290 outpatient dialysis centers, of which 2197 centers are located in the United States; 93 centers are located in 10 countries outside of the United States. During the first quarter of 2015, DaVita opened a total of 18 new dialysis centers, acquired one dialysis center, and closed two dialysis centers in the United States. The company also opened two new dialysis centers outside of the United States.

DaVita’s first quarter results included a tentative $495 million settlement for a civil suit brought by private attorneys in 2009, Modern Healthcare reported. The suit alleged DaVita wasted medication and billed Medicare for it. DaVita has invested heavily in compliance programs to avoid any potential problems.