Revenues Rise at Bayer, View Backed - Analyst Blog
30 10월 2012 - 5:50PM
Zacks
Bayer’s (BAYRY)
earnings during the third quarter of 2012 came in at €1.20 per
share (approx $1.50) compared with €1.12 (approx. $1.58) per share
in the year-ago period. The company recorded an 11.5% (5.5% on an
adjusted basis) growth in revenues to €9,665 million. Growth was
witnessed across all the major divisions at Bayer.
Segmental Performance
The three major segments: Healthcare, Crop Science and Material
Science accounted for approximately 48.8%, 17.0% and 31.0%,
respectively, of total revenue during the reported quarter.
Revenues from the Crop Science, Healthcare and the Material Science
segments improved by 19.0%, 12.4% and 8.1%, respectively.
The Healthcare segment recorded revenues of €4,719 million in the
third quarter of 2012. Both sub-segments, Consumer Health (adjusted
growth of 4.7%) and Pharmaceuticals (adjusted growth of 6.1%)
performed well in the quarter.
Robust sales of products, such as Xarelto, Kogenate, Glucobay and
Mirena boosted sales of the Pharmaceuticals segment.
Growth in the Consumer Health subgroup, comprising Bayer’s
over-the-counter drug business for human beings and animals, was
primarily driven by impressive performances across all sub-groups -
Consumer Care, Animal Health and Medical Care.
Sales in the Crop Science division, which is engaged in developing
and marketing chemical crop protection products (insecticides,
herbicides, and fungicides), seeds and integrated plant
biotechnology solutions for agricultural and non-agricultural uses,
recorded sales of €1,641 million in the third quarter of 2012.
Crop Science segment exhibited solid growth in all the regions,
especially Europe and North America, driven by improved market
conditions. The Material Science segment, one of the world’s
largest polymer manufacturers, posted impressive sales of €2,992
million in the reported quarter. Volume growth was primarily
responsible for the impressive performance of the segment during
the reported quarter.
2012 Projection Backed
Apart from releasing its financial results, Bayer also reaffirmed
its guidance for 2012. Earnings at Bayer are still expected to
increase by 10% year over year. Bayer continues to expect 2012
sales in the range of €39 billion to €40 billion.
The Healthcare segment revenues are expected to increase 3%–4%.
While Pharmaceuticals sales are expected to increase marginally,
Consumer Health is expected to exhibit mid-single-digit sales
growth.
Crop Science segment sales are expected to increase 10%. The
company expects the segment to outperform the market. The Material
Science segment revenues are expected to increase marginally over
2011 levels.
Bayer to Buy Schiff Nutrition International
In a bid to expand its product portfolio, the Healthcare unit of
Bayer inked a deal to buy nutritional supplement company
Schiff Nutrition International, Inc. (SHF) for
$34.00 per share in cash. The total value of the deal is estimated
at approximately $1.2 billion (approx. € 920 million). The deal is
expected to close by year end.
Our Recommendation
We have an Outperform recommendation on Bayer. The stock carries a
Zacks #2 Rank (Buy rating) in the short run.
BAYER A G -ADR (BAYRY): Free Stock Analysis Report
SCHIFF NUTRITN (SHF): Free Stock Analysis Report
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