Bayer (BAYRY) Q4 Earnings Beat Estimates, Sales Down Y/Y

Bayer AG’s BAYRY fourth-quarter 2017 core earnings per share from continuing operations were 42 cents per American Depository Receipt (“ADR”), which topped the Zacks Consensus Estimate of 31 cents.

On Sep 20, 2017, Bayer performed an ADR ratio change. With the new ratio, four Bayer ADRs correspond to one Bayer ordinary share. The fourth quarter 2017 core earnings per share incorporate the effect of ADR ratio change. Earnings were down 40% year over year from 30 cents per ADR.

Total sales in the quarter were approximately $10.14 billion, down 6.4% year over year. While the company registered growth in sales and earnings at Pharmaceuticals, business declined at Consumer Health and Crop Science. Animal Health improved as well.

All growth rates mentioned below are on a year-over-year basis and after adjusting for currency and portfolio changes.

Fourth-Quarter and Full Year Highlights

The Bayer Group lost de facto control over the Covestro Group at the end of September 2017. As of Sep 30, 2017,  there are four reporting segments – Pharmaceuticals, Consumer Health, Crop Science and Animal Health. As such, total figures for the four Life Science segments will no longer be presented separately.

Revenues at the Pharmaceuticals segment decreased 1.4% to €4,215 million in the fourth quarter but increased 2.6% to €16,847 million in 2017. The growth for full year was backed by a persistently strong performance of the key products like Xarelto, Eylea, Xofigo, Stivarga and Adempas. However, this division experienced a considerable decline in Kogenate’s sales, mainly because of a distribution partner placing a lower volume of orders for the active ingredient.

However, Consumer Health sales were down 9.1% to €1,399 million in the fourth quarter and declined 2.9% to €5,862 million in 2017.  The decline was due to decline in revenues in North America, particularly in the United States, owing to the challenging market environment. Further, the Chinese authorities unexpectedly changed the legal status of two of Bayer’s medicated skincare brands from OTC to prescription, which led to sales declines in the fourth quarter of 2017. However, business expanded slightly in Europe/Middle East/Africa, while sales in Latin America came in at the prior-year level.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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