Bayer AG posted earnings just above estimates amid continued demand for agricultural seeds and chemicals, including controversial weed killer Roundup.
The German company posted core earnings per share of 1.13 euros in the third quarter, slightly above the median estimate of 1.12 euros, according to a release on Tuesday. A key earnings metric at Crop Science increased by a third.
“We are well on the way to achieving our financial targets for the full year, which we raised in August,” said CEO Werner Baumann in the statement.
Bayer said cost increases triggered by high inflation are likely to continue into 2023 – adding that Germany aims to be independent of Russian gas by the end of this year. Global supply chains remain under pressure and avoiding bottlenecks is a key priority, she added.
Bayer stock slipped about 1% in early trade. The share has risen by around 14% this year, making it one of the top performers in Germany’s leading index, the DAX.
Crop Science benefited from higher prices for everything from corn seed to the herbicide glyphosate. Demand was particularly strong in Latin America and Europe, the Middle East and Africa — which helped offset declining sales in North America, where farmers planted fewer crops this summer amid drought conditions.
Bayer has yet to show that its momentum is sustainable as the company faces increasing competition in the soybean market.
The pharma division saw rapid growth for new cancer drug Nubeqa, a key element in the company’s strategy to remain competitive as blockbuster drugs Xarelto, a blood thinner, and eye care medicine Eylea face increased competition. Xarelto sales are already declining, thanks to a setback in China and a patent expiration in Brazil.
The Consumer Health business posted gains, mainly due to higher demand for cough and cold products.
Baumann is under pressure to show that his vision for the company — combining its herbal, pharmaceuticals and consumer health businesses — makes sense. Bayer’s board of directors has quietly begun looking for a successor and has announced an early departure, Bloomberg News reported in September, citing people familiar with the matter.
The CEO has weathered shareholder frustration and legal turmoil since becoming CEO in May 2016 after spearheading the acquisition of crop science giant Monsanto. The record takeover in Germany became a legal headache as Bayer set aside an estimated $16 billion to cover lawsuits alleging Roundup causes cancer.
The company is also grappling with a growing problem related to US plaintiffs attributing their illnesses to exposure to polychlorinated biphenyls, or PCBs, another legacy Monsanto product.
https://www.independent.ie/business/farming/agri-business/bayer-profit-boosted-by-demand-for-seeds-and-weed-killer-42130253.html Bayer profit strengthened by demand for seeds and weed killers