Headache for Bayer as results show fall in Q1 sales and earnings

The Bayer Cross in Leverkusen at night
The Bayer Cross in Leverkusen at night Copyright Bayer
Copyright Bayer
By Doloresz Katanich
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Mixed earnings results from the German Bayer Group put the pharmaceutical giant's share prices on a rollercoaster ride in Tuesday's early trading.

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Shares in Bayer AG took a fall in early trade after the after the pharmaceutical company reported shrinking sales and earnings from the first three months of 2024, although the latter came in above expectations. Shares later recovered.

Quarterly earnings before interest, taxes, depreciation and amortisation (EBITDA), before special items were down 1.3% to €4.4 billion. Analysts estimated €4.15 billion. 

Group sales dropped to €13.7 billion, a 0.6 % drop on a currency and portfolio adjusted basis compared with the previous year. Bayer's report blamed a negative currency effect for €525 million of that fall.  

Net income was down 8.2% at €2 billion, while core earnings per share decreased by 4.4% €2.82.

Out of its three divisions – pharmaceuticals, consumer health and crop science – only the first saw a boost in its sales. 

Chief executive officer (CEO) Bill Anderson said in a statement: "The Pharmaceuticals Division saw gains in growth and profitability, and the Crop Science Division outperformed in a difficult market. Consumer Health started slower, but is set to get back to growth over the course of the year."  

**Bayer's continuing struggle links back to Monsanto purchase **

The 160-year-old German company, known for inventing aspirin, is hoping to be on its way back to regaining investors' trust while the share price and market capitalisation are close to a 20-year low.

A big part of Bayer's ongoing struggle is due to its costly purchase of Monsanto. Bayer acquired Monsanto in 2018, and the company has since been fighting thousands of claims in court that the subsidiary's glyphosate-based products cause cancer.

While addressing ongoing litigation in the US, investors in Germany and the United States, have also filed lawsuits claiming damages suffered due to the drop in the company's share price, related to this acquisition.

The firm's current restructuring plan consists of cutting down expenses and management, saving the company some €2 billion in annual organisational costs by 2026.

Bayer has lowered its full-year earnings outlook, and adjusted to new currency rates but continues to reaffirm its operational expectations.

"The negative impact from anticipated currency effects has increased based on the closing rates as of March 31, 2024," the report said. 

"Applying the rates on that closing date instead of December 31, 2023, leads to a reduction in the forecast for EBITDA before special items from between €10.4 billion and €11.0 billion to between €10.2 billion and €10.8 billion."

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