Bayer, the German drugmaker trying to acquire U.S. seed company Monsanto, surpassed second-quarter earnings expectations and raised its guidance for the year as strong gains in stroke prevention pill Xarelto offset sluggish farming pesticides markets.
Second-quarter profit before interest, taxes, depreciation and amortization (EBITDA), adjusted for one-off items, gained 5.7 percent to 3.05 billion euros ($3.35 billion), above the average estimate of 2.90 billion in a Reuters poll among analysts.
Bayer, the inventor of aspirin and maker of Yasmin birth control pills, said it now expected EBITDA before special items to increase by a high-single-digit percentage, where it had previously seen a mid-single-digit gain.
Sales in Eylea, the drug jointly developed with Regeneron which helps stem the loss of vision in the elderly, also exceed the market view.
But Bayer also became the latest maker of farming supplies to take a hit as depressed prices of agricultural produce such as wheat and corn have prompted growers to reduce pesticide use to a minimum. Rival Syngenta said last week that excessive rainfall in Europe, among other factors, has kept farmers from spraying.
Adjusted EBITDA at Bayer's Crop Science unit dropped 8.2 percent to a worse-than-expected 663 million euros.
Bayer last week pointed to Monsanto's recent weak business performance to champion its sweetened $64 billion offer which Monsanto's management had turned down.