German drugs and chemicals maker Bayer says healthcare earnings boosted second quarter operating profit by 14%. But its shares fell as investors worried about the effects of its recent takeover of another drugmaker Schering. Attention was focused on Crop Sciences, its agrochemicals unit, which is to be restructured. Factories will be closed or revamped and 1,500 jobs are to go to save three hundred million euros a year.
Crop Sciences sales, at 1.6 billion euros, were down 1.6%, but due to cost cuts, pre-tax profits rose 11.2% to 368 million euros.
However the company warned the farm chemicals business, which develops weed-killers, pesticides and seeds, will probably miss its forecast for profit growth this year.
By contrast the growth estimate for the health-care unit was doubled. Bayer also raised the forecasts for its MaterialScience division, which makes plastics and chemicals, even though analysts are less optimistic. They cite increased capacity in the sector as well as a slowdown in demand and high raw material costs.