Bayer Second-Quarter Operating Profit Rises 30%
Bayer reported a 30% jump in quarterly operating profit on Tuesday, driven partly by strong sales of its cancer and contraceptive drugs, and reaffirmed its targets for the full year.
Bayer said earnings before interest, taxes and special items rose to 1.19 billion euros ($1.65 billion) in the second quarter, compared with a 1.13 billion euro average forecast in a Reuters poll of 14 analysts.
Bayer, which invented Aspirin more than a century ago, boosted its healthcare business after its 17 billion-euro acquisition of Schering last year.
On Tuesday, Bayer confirmed it expected its core operating margin before special items to exceed 20 percent for the full year for the first time because of improved earnings prospects at its healthcare unit.
"The Bayer group had a very good second quarter in 2007, following the excellent start to the year," Bayer Chief Executive Werner Wenning said in a statement.
Bayer shares were 2% higher, compared with a 1.1% gain on the German blue-chip DAX index.
Second-quarter net profit rose 46% to 660 million euros on a 22% rise in sales to 8.22 billion euros.
Sales of Bayer's top-selling multiple sclerosis drug, Betaseron, rose only 2.8% pro forma in the second quarter because of currency effects, while sales of contraceptive drug Yasmin increased a pro forma 38 percent, Bayer said.
Betaseron competes with rival drugs such as Merck KGaA's Rebif and Biogen's Avonex.
Sales of cancer drug Nexavar rose 161% to 60 million euros.
Bayer said operating profit before special items at its CropScience unit, which competes with Syngenta and Monsanto, rose 14% to 262 million euros thanks to its crop-protection unit and cost cutting.
The crop-protection business had a tough 2006, but investors are hoping a recovery in agricultural markets this year will boost revenues and profit.
Bayer said it now expected sales at the unit to grow in the second half of the year. It had previously said full-year sales would grow slightly faster than the market.
The full-year underlying EBITDA margin target for the division is now more than 22%, compared to the previous forecast of an improvement approaching 22%, it added.
The stock has risen about 28% this year, outshining a 15% gain in the pan-European DJ chemicals sector and a 5% dip in healthcare index.