German pharma and life sciences firm Bayer said it completed the "biggest acquisition in its history" Wednesday but delivered a series of mixed results for its second quarter.
Bayer gave more details of the acquisition of U.S. firm Monsanto, which officially completed on June 7 this year and came in at $63 billion, including debt. The purchase helped its core earnings for the second quarter and offset weak health care sales.
Here are some of the highlights for the second quarter:
Adjusted earnings before interest, tax, depreciation and amortization came in at 2.34 billion euros ($2.71 billion) for the period. This narrowly missed estimates from a Reuters poll. Net income for the quarter saw a 34.7 percent fall, but it also reported an 8.8 percent increase in sales from a year ago, taking its total group sales to 9.48 billion euros.
The increase in sales was mainly boosted by its crop science business, where sales rose by 21.4 percent. Bayer said this increase was due to the recognition of significantly higher provisions for product returns in the prior-year quarter due to high inventory levels in Brazil. The rise in sales was also supported by the acquisition of Monsanto. The deal made Bayer and Monsanto the world's largest integrated pesticides and seeds company.
Bayer Chief Executive Werner Baumann spoke to CNBC Wednesday about the major acquisition, saying the firm remained "very excited about the attractive growth prospects" and the potential to capitalize on the "leadership positions we are going to have going forward."
But shares slipped 2.3 percent as European markets opened Wednesday morning. Back in August, the stock of the German multinational saw a sharp fall after Monsanto was ordered to pay $289 million in damages over alleged links between a glyphosate-based weedkiller and cancer. Bayer is expected to face years of legal wranglings with around 8,000 lawsuits, according to Reuters.
CEO Baumann said the company stood "firmly behind glyphosate as a safe product with a very, very strong regulatory record around the world."
He added that there was "absolutely no indication on a scientific and regulatory base that there is a cause and effect relationship between the use of glyphosate and the onset of cancer disease."
Baumann was also quizzed about reports of potential job losses at its drug research unit. He said it was "constantly reviewing" all of its businesses for "improvements in efficiency and performance in order to stay inline with our peers and develop competitive edges." He also wouldn't be drawn on any potential split between the life sciences and pharma sides of the company.