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Bayer Q1 net income falls by 36,5%

April 26/2019

MOSCOW (MRC) -- Bayer AGs earnings report gave Chief Executive Officer Werner Baumann a welcome boost as he prepares for a key meeting Friday where some investors will vent concerns about the troubled Monsanto acquisition, said the company.

The agriculture unit posted a 5.5% jump in first-quarter sales after adjusting for currency and portfolio changes, the company said as it reported earnings for the group that beat analysts estimates. Bayer rose as much as 4.5% in Frankfurt, its biggest gain since early January.

Monsantos growth rate is welcome news for Baumann, coming despite flooding in the U.S. Midwest that hurt rivals including DowDuPont Inc. and the impact of China trade tensions on the U.S. soybean sector. Hes heading into Bayers annual general meeting as the German company faces a broad set of challenges, led by the mounting number of lawsuits alleging that its Roundup weedkiller is linked to cancer.

The earnings beat is a temporary distraction from the Roundup woes, according to Michael Shah, an analyst at Bloomberg Intelligence. Its a much-needed boon to sentiment, yet its likely to be short-lived, he said in a note.

The surprise sales jump at Monsanto came from, among other things, a strong performance in cotton seeds, according to Dennis Berzhanin, an analyst at Pareto Securities. On the pharma side, top-selling treatments Xarelto and Eylea which face loss of patent protection next decade both achieved sales growth of more than 15%. Quarterly profit was 2.55 euros a share, while analysts had estimated 2.48 euros a share. Even so, Bayer held to its group earnings target and 4% sales growth forecast for 2019.

Buying Monsanto was supposed to secure Bayers position in the rapidly consolidating agrochemicals market and deter outside forces from trying to split up the company, which sells everything from aspirin and cancer medicines to shoe inserts and soybean seeds. Now, investors are hoping to find out if and when the company will set aside money to settle the mountain of U.S. lawsuits surrounding Roundup, also known by its chemical name, glyphosate.

The company was facing suits from 13,400 U.S. plaintiffs as of April 11, about 20% more than in late January. That figure suggests that settlement terms could exceed $6 billion, which will continue to scare potential shareholders and as well as credit investors who want to see Bayer reduce its debt, according to Bloombergs Shah.


mrcplast.com
Author:Anna Larionova
Tags:petroleum products, petrochemistry, Bayer.
Category:General News
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