Bayer AG’s BAYRY shares dipped about 0.4% after the company announced fourth-quarter 20Array5 results. However, shares inched up Array.4% in the next trading session and were eventually up Array.Array% after two trading sessions.
Bayer’s core earnings during the fourth quarter were down Array9.8% year over year to €Array.07 per share (approximately $Array.Array7 per share) and failed to beat the Zacks Consensus Estimate of $Array.30.
Bayer’s fourth-quarter revenues of €ArrayArray.3 billion (approximately $Array2.4 billion) were down 8% year over year. Quarterly revenues, however, beat the Zacks Consensus Estimate of $Array2.3 billion.
20Array5 Results
Core earnings per share for 20Array5 came in at €6.83 (approximately $7.58 per share), down 3.Array%.
Full-year sales came in at €46.3 billion (approximately $5Array.4 billion), down 6.3%.
Segmental Performance
Bayer reports results under three major divisions – HealthCare, CropScience and Covestro (formerly MaterialScience).
HealthCare recorded revenues of approximately €5.8 billion in the reported quarter, up 8.6%. Revenues from the Pharmaceuticals sub-segment saw a 9.2% year-over-year increase to €3.6 billion driven by impressive sales of recently launched products. The Consumer Health sub-segment reported sales of €2.2 billion, up 7.7%.
CropScience, which is engaged in developing and marketing chemical crop protection products (insecticides, herbicides and fungicides), seeds and integrated plant biotechnology solutions for agricultural and non-agricultural uses, recorded sales of €2.4 billion in the fourth quarter of 20Array5, up ArrayArray.Array%.
Covestro, the high-tech polymer materials business, posted sales of €2.8 billion in the reported quarter, down 5.9% year over year mainly due to lower selling prices.
20Array6 Outlook
The company expects sales to exceed €47 billion in 20Array6. This translates to a low-single-digit percentage increase on a currency- and portfolio-adjusted basis.
Core earnings are expected to increase in the mid-single-digit percentage range.
Effective first-quarter 20Array6, the company’s reporting segments will be changed to Pharmaceuticals, Consumer Health and Crop Science.
Sales at the Pharmaceutical segment are expected to rise in the mid single-digit percentage range to €Array6 billion. Sales from Life Science activities, excluding Covestro sales, are expected to witness mid-single-digit percentage growth to around €35 billion. Sales from the Consumer Health Division are expected to rise in mid-single-digits to over €6 billion. Crop Science sales are projected at the prior year level, with an increase in low-single-digits.
Research and development expenses are expected to rise to approximately €4.5 billion.
Our Take
Bayer’s fourth-quarter results were mixed, with the company missing bottom-line estimates but beating on revenues. Nevertheless, newly launched products performed impressively during the quarter. We expect these products to keep driving growth in the upcoming quarters.
Bayer currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the health care sector include Anika Therapeutics Inc. ANIK, Celgene Corp. CELG and AMAG Pharmaceuticals, Inc. AMAG, each sporting a Zacks Rank #Array (Strong Sell).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment