Company Reports

Carl Zeiss delivered revenue growth of 2% and adjusted earnings per share growth of 29% for its fiscal third quarter. Both figures landed ahead of FactSet consensus.

Carl Zeiss Meditec is one of the largest medical technology companies in the world. It operates in two segments: ophthalmology and microsurgery.

Carl Zeiss reported a revenue decline of 6% (or 4% in constant currencies) and an adjusted EPS decline of 27% during the second fiscal quarter. Both figures landed ahead of FactSet consensus. Shares traded up 13% on May 12 results.

Carl Zeiss Meditec is one of the largest medical technology companies in the world and it operates in two segments: ophthalmic devices, or OPT, and microsurgery, or MCS.

Carl Zeiss Meditec delivered a 5% revenue decline and a 550-basis-point decrease in adjusted EBITA for its fiscal first quarter. Full-year guidance was pulled in January but is expected be reinstated by the second-quarter earnings release. The shares fell 6% in Feb. 12 trading.

Carl Zeiss reported preliminary first-quarter results with revenue down roughly 5% (versus FactSet's estimate of flat) and EBITA margin of 2%, down 500 basis points from last year's. Management warned that full-year guidance is unlikely to be met, sending shares down 17%.

Carl Zeiss Meditec is one of the largest medical technology companies in the world and it operates in two segments: ophthalmic devices, or OPT, and microsurgery, or MCS.

Carl Zeiss delivered 8.3% and 6.5% revenue and adjusted EPS growth, respectively, during its fourth fiscal quarter. Shares are down roughly 6% following the readout Dec. 11.

Carl Zeiss Meditec is one of the largest medical technology companies in the world and it operates in two segments: ophthalmic devices, or OPT, and microsurgery, or MCS.

Carl Zeiss announced Dec. 8 that it and Maximilian Foerst, member of the Zeiss Group Executive Board and chief executive of Carl Zeiss Meditec, have mutually agreed to terminate his mandate, following a conflict of interest involving interactions dating back years with an individual in the firm.

Carl Zeiss Meditec is one of the largest medical technology companies in the world, and it operates in two segments: ophthalmic devices, or OPT, and microsurgery, or MCS.

Carl Zeiss reported fiscal third-quarter revenue of EUR 549.6 million, representing 1.9% growth year over year. Management reaffirmed its full-year outlook, guiding moderate revenue growth supported by order stabilization and the DORC acquisition.

Narrow-moat Carl Zeiss Meditec reported solid second-quarter earnings with results above our expectations. Total revenue of EUR 560 million was up 18.6% year over year, or up 7.3% excluding DORC acquisition and currency impacts, as broad-based growth across segments helped drive positive results. Equipment remains slightly below last year, but we see this simply due to the timing of new Kinevo 900 and Visumax 800 launches rather than to commercial missteps. Visumax 800 launched on March 1, and similar to the Kinevo turnaround we think the second half should illustrate a clearer picture of commercial demand, which we expect to be healthy, for the new product. We still expect the second half of fiscal 2025 to see a solid ramp up in segment sales as the new product rolls out. We maintain our fair value estimate of EUR 73 per share and see a modest upside to the name even after May 13’s mid-single-digit rally.

Narrow-moat Carl Zeiss announced on May 7 that Chief Executive Officer Markus Weber will step down from his role on May 31 of his own accord. Weber started his Zeiss career in 2002 and served various roles before taking the helm in 2022. In the wake of the covid-19 pandemic, Weber led the firm through a dynamic environment. While shares have suffered since peaking in 2021, we think it is more due to a difficult environment, such as a weak Chinese market, high rates in the US, and the ensuing margin contraction, and not Weber’s leadership. We maintain our fair value estimate of EUR 73 per share.

On April 2, President Donald Trump announced a sweeping set of tariffs on all imports ranging from 10% to varying reciprocal rates, effective on April 5. In response, the broad vision care market opened on April 3 about a mid-single-digit percent down from April 2’s close and firms under our coverage—Alcon, Bausch & Lomb, Carl Zeiss, and Cooper Companies—are all trading at the level or lower at the time of writing.

Narrow-moat Carl Zeiss' fiscal first-quarter results largely met our expectations. Total sales of EUR 490 million were up 3.3% year over year but down 7.3% excluding a EUR 50 million contribution from the Dutch Ophthalmic Research Center acquisition. The Americas performed well, delivering 19.3% growth and slightly positive growth even after excluding DORC impacts. Europe, the Middle East, and Africa was up 11.2% but slightly down without DORC, and Asia-Pacific was down 11.5%. The shares were down about 12% in Feb. 12 trading, but we maintain our EUR 73 fair value estimate. We believe the market reaction offers significant upside to investors willing to weather near-term volatility and market weakness that we think is temporary.

Narrow-moat Carl Zeiss Meditec reported soft fourth-quarter earnings that came in lower than our expectations and ended the year on a soft note. Total sales of EUR 580 million during the quarter were flat year over year, but full-year sales were down 1.1%, marking the first time Zeiss failed to deliver top-line growth since the covid-affected 2020. The main culprit was the microsurgery segment that saw sales drop over 14%, or 7% for the full 12 months, and created headwinds that the fair performance from the ophthalmology segment, which was up 5.2% during the quarter and 0.8% for the full year, could not offset. As we noted many times throughout the year, a challenging macro environment, high interest rates, and uncertain consumer sentiment weighed down investment appetite. Furthermore, the sluggish China market driven by the reduction in certain surgical consumables inventory resulted in tough comparisons. Given the continued challenges in the environment and management’s expectation of slow recovery in the investment climate, we trim some of our near-term assumptions and lower our fair value estimate to EUR 73 per share from EUR 77. While the return to normalization in the market has been slower than our original forecast, we think the cyclical troughs are largely past us and believe Zeiss is well equipped to enjoy positive long-term trends. Shares were depressed after earnings, down about 12% at the time of writing, and we think patient investors who are willing to hold the stock until market recovery could enjoy healthy upside on the name.

Carl Zeiss Meditec is one of the largest medical technology companies in the world, and it operates in two segments: ophthalmic devices, or OPT, and microsurgery, or MCS.

Carl Zeiss Meditec is one of the largest medical technology companies in the world, and it operates in two segments: ophthalmic devices, or OPT, and microsurgery, or MCS.

We are raising narrow-moat Carl Zeiss’ uncertainty rating to High from Medium. The Morningstar uncertainty rating reflects quantitative analysis of the firm based on the return ranges used by our star rating system as well as short-term macroeconomic headwinds. While our view on the fundamental strength of the firm remains favorable, we think the challenged end market and the subsequent margin compression have severely weighed down share price. Despite macroeconomic conditions showing improvement, interest rates remain relatively high for the Americas and Germany, two key regions for the firm, and weighed down investment appetite among customers in recent quarters. We believe the recovery to the firm’s medium-term target of 20% core EBIT margin will take longer than previously thought. We maintain our fair value estimate of EUR 77 per share.