Coronavirus Pushes Bayer's Sales and Earnings Higher--Update
April 27 2020 - 3:20AM
Dow Jones News
By Ruth Bender
BERLIN -- Bayer AG Monday posted a rise in sales and profits for
the first quarter as customers of the German company's farming and
drugs businesses stocked up on products amid the novel coronavirus
pandemic.
While the chemicals-to-pharmaceuticals company benefited from
the buildup of stock, Bayer said the pandemic also slowed progress
the company had made on resolving its high-stakes legal battle with
U.S. plaintiffs alleging the company's Roundup herbicides cause
cancer.
One of a select group of companies whose business thrived amid
nationwide lockdowns in the past quarter, Bayer said sales rose
4.8% to EUR12.85 billion ($13.91 billion), beating analyst
expectations. Net profit rose to EUR1.49 billion from EUR1.24
billion a year earlier. Bayer said it couldn't predict how the
pandemic would affect its business, positively or negatively, over
the rest of the year.
Sales at Bayer's consumer health unit, which produces aspirin
and had been struggling to boost sales in recent years, rose 13.5%
in the quarter due to the strong increases in demand across regions
and products. The stockpiling of anticoagulant medication Xarelto
also drove sales.
In the crop science business, which includes recently acquired
Monsanto, sales benefited from the advanced purchases of its seeds,
fungicides and pesticides in Europe and the Middle East as well as
a substantial increase in acreages in the U.S.
"With our life science product portfolio in the areas of health
and nutrition, we have shown our ability to successfully continue
our business operations in a challenging environment and deliver a
positive contribution for our stakeholders even during a time of
crisis," Chief Executive Werner Baumann said in a statement.
The latest rise in earnings comes as investors continue to wait
for Bayer to settle the legal battle over the Roundup weedkiller
that has been weighing on its share price.
Bayer has been negotiating a settlement over the claims that
Roundup, which was inherited from Monsanto, cause cancer. Bayer
said it had made progress on mediation ahead of the pandemic, but
the rapid spreading of the virus then "significantly slowed" the
mediation process.
The total number of plaintiffs rose to 52,500 as of April 14 but
the pace of growth has slowed compared with recent quarters.
Bayer said it would continue to engage in mediation but that
now, more than ever, it would be careful about how much it would
agree for a settlement.
"The company will continue to consider a solution only if it is
financially reasonable and puts in place a mechanism to resolve
potential future claims efficiently," Mr. Baumann said. "Against
the background of a looming recession and looking at, in part,
considerable liquidity challenges, this applies now more than
ever."
Write to Ruth Bender at Ruth.Bender@wsj.com
(END) Dow Jones Newswires
April 27, 2020 04:05 ET (08:05 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
Bayer Aktiengesellschaft (PK) (USOTC:BAYRY)
Historical Stock Chart
From Apr 2024 to May 2024
Bayer Aktiengesellschaft (PK) (USOTC:BAYRY)
Historical Stock Chart
From May 2023 to May 2024