Bayer Misses Forecasts; CEO Upbeat on 2008
German drugs and chemicals group Bayer missed fourth-quarter earnings expectations Thursday, sending shares 4.7 percent lower on the DAX, but CEO Werner Wenning told CNBC he remains optimistic about the company’s outlook for this year.
"What we just said today (is that) we would perform first quarter 2008 in line with fourth quarter 2007," Wenning told "Power Lunch Europe".
The group’s 2007 fourth-quarter earnings before interest, taxes and special items rose 24 percent to 774 million euros ($1.2 billion), below the 795 million euro average estimate in a Reuters poll of 17 analysts.
Shares in the group were trading in the lowest slot on the Daxx at 51.66 euros at 2:58 pm London time on Thursday.
Net profit fell 79 percent to 67 million euros, due partly to charges for the integration of Schering, which it bought for 17 billion euros in 2006.
Sales edged up 1 percent to 8 billion euros thanks to its contraceptive and multiple sclerosis drugs, as well as farming products used to fight weeds and fungi.
Despite several steep drops in figures, Wenning told CNBC that 2007 was the best year in the history of Bayer.
According to the CEO, the group met all of their objectives, came out with an EBITA margin of 20.9 percent, and is looking to improve performance in the health care sector in 2008.
Wenning also noted the growth opportunity available in the crop science market, but will continue to take a more cautious approach regarding material science due to the recent slowdown in the U.S. and market volatility.
"I'm always relaxed," Wenning said with a laugh. "But overall, looking back at what we achieved, what we are saying for 2007 and for future years, I believe we have a highly competitive portfolio, leading market positions for the majority of our businesses."
--Reuters contributed to this story