Bayer Q2 profits jump on new drugs, lower charges (Update)

by David Mchugh

German drug and chemicals company Bayer AG says net profit rose 75 percent in the second quarter thanks to lower one-time charges and strong sales of new products including anti-clotting drug Xarelto and cancer drug Stivarga.

But falling earnings at its high-tech materials division led the company to say it would be harder to achieve its earnings goals for the year.

Net profit came in at 841 million euros ($1.1 billion), up from 481 million euros a year ago when the company had 611 million euros in one-time charges, mostly for U.S. lawsuits over its birth-control pill. Revenues rose 1.9 percent to 10.36 billion euros.

The company, which is based in Leverkusen, Germany, said Wednesday it also saw increased sales in its pharmaceuticals division thanks to better-than-expected performance from its new products. Top performers were Xarelto, which is used to prevent dangerous blood clots in people having hip or knee replacement; Eylea, which treats the aging-related eye disease macular degeneration, and cancer drug Stivarga. Pharmaceutical sales rose 5.5 percent to 2.83 billion euros.

The company's farm business saw operating earnings, which exclude some financial items, rise 14 percent thanks to continuing high prices for agricultural commodities. The division makes seeds as well as compounds used to kill weeds, bugs and fungus.

However, Bayer recorded lower earnings at its materials business due to lower demand and prices in Asia and Europe. Operating earnings for the division, which makes things like high-tech polycarbonate plastics, fell 28.5 percent.

CEO Marijn Dekkers said the company was sticking with its outlook for the year but said that reaching it appeared "increasingly ambitious" because of the slowdown at the materials division. "It remains to be seen to what extent the unexpectedly weak development at MaterialScience will be offset by our improved performance in the Life Sciences," which includes pharmaceuticals and farm chemicals, Dekker said.

Bayer forecasts full-year sales for 2013 to increase 4-5 percent and an increase in earnings before financial items and one-time charges of "a mid-single digit percentage."

The company's earnings a year ago were lower because of money that had to be set aside for settlement costs from lawsuits over birth control pills marketed as Yasmin and YAZ. Bayer faced lawsuits in the United States from women claiming the contraceptive caused blood clots that led to serious health consequences. In this year's quarter, one-time charges dropped to only 109 million euros.

Once one-time charges and financial items such as interest, taxes, depreciation and amortization are set aside, the company's second-quarter earnings rose 1.2 percent to 2.19 billion.

Bayer shares were 3.1 percent higher at 86.95 euros in early afternoon trading in Europe.

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Bayer profits up 11.5 percent on new drugs

Apr 25, 2013

German chemical and pharmaceutical company Bayer AG said Thursday that its net profit rose 11.5 percent in the first quarter as new drugs, led by blood thinner Xarelto, boosted sales.

Higher prices for MS drug help drug firm Merck

May 14, 2013

(AP)—Higher prices for its multiple sclerosis drug Rebif helped German pharmaceutical and high-tech materials company Merck KGaA post a 54 percent rise in first-quarter profit.

SAP profit up 10 percent in second quarter

Jul 18, 2013

(AP)—Business software maker SAP AG said net profit grew 10 percent in the second quarter to 724 million euros ($948 million) despite the economic slowdown in Asia.

Recommended for you

What are the chances that your dad isn't your dad?

Apr 16, 2014

How confident are you that the man you call dad is really your biological father? If you believe some of the most commonly-quoted figures, you could be forgiven for not being very confident at all. But how ...

New technology that is revealing the science of chewing

Apr 15, 2014

CSIRO's 3D mastication modelling, demonstrated for the first time in Melbourne today, is starting to provide researchers with new understanding of how to reduce salt, sugar and fat in food products, as well ...

After skin cancer, removable model replaces real ear

Apr 11, 2014

(HealthDay)—During his 10-year struggle with basal cell carcinoma, Henry Fiorentini emerged minus his right ear, and minus the hearing that goes with it. The good news: Today, the 56-year-old IT programmer ...

Italy scraps ban on donor-assisted reproduction

Apr 09, 2014

Italy's Constitutional Court on Wednesday struck down a Catholic Church-backed ban against assisted reproduction with sperm or egg donors that has forced thousands of sterile couples to seek help abroad.

User comments