German pharmaceutical and chemicals giant Bayer announced yesterday a second quarter net profit well ahead of analyst forecasts and said it saw signs of improvement in the market.
Sales at its construction-linked MaterialScience division were stabilizing and in Healthcare had increased, it said, with the outlook for the year as a whole more positive.
Bayer’s three months to last month net profit fell 7.3 percent from a year earlier to 532 million euros (US$750 million) on sales down 5.9 percent at 8 billion euros.
Analysts had expected a much lower net profit of 376 million euros after the company’s first quarter earnings plunged 44 percent.
Second quarter core earnings before exceptional items were down 11.8 percent at 1.1 billion euros, a statement said, although the group’s pharmaceutical unit posted strong sales and earnings.
Amid what chairman Werner Wenning acknowledged was a difficult environment, “the clear increase in sales and earnings at HealthCare was particularly pleasing,” he said.
Investors cheered the results and Bayer shares rose 3.22 percent to 41.34 euros in opening trades on the Frankfurt stock exchange, while the DAX index of leading German stocks was essentially unchanged overall.
Results at the MaterialScience division, hit hard by the global economic slump, improved from the first quarter but remained well below year-earlier levels.
“The signs that the bottom of the cycle has been reached in the industrial business have thus been confirmed, although a lasting improvement is not yet in sight,” the company said.
“We are adhering to our ambitious earnings targets for the full year 2009,” Wenning said.
These include total sales of between 31 billion and 32 billion euros and a limit in the decline of core earnings before exceptional items to 5 percent.
Breaking down the pharmaceutical results, Bayer said its fastest growing brand was the cancer drug Nexavar, followed by the multiple sclerosis treatment Betaferon/Betaseron.
Sales of the group’s Aspirin over-the-counter medicine fell 12.6 percent.
The CropScience division which makes fertilizers, herbicides and insecticides posted a 2.7 percent sales increase to 1.85 billion euros.