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Savings net Bayer 44% rise in income
By George Frey |
February 27, 2010, Saturday
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Print Edition
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GERMAN chemical and pharmaceutical company Bayer AG yesterday said its net income rose 44 percent in the fourth quarter to 153 million euros (US$208 million) as cost savings and a pickup in some business offset negative currency effects and charges for the integration of Schering.
The company, famous for its Bayer aspirin, had earned 106 million euros in the October-December period of 2008. Fourth-quarter revenue for the company was nearly unchanged at 7.9 billion euros.
For the full year 2009, the company said net income fell 21 percent to 1.4 billion euros from 1.7 billion euros in 2008, while revenue fell 5.3 percent to 31.2 billion euros from 33 billion euros in 2008.
Bayer said currency effects took a toll of some 140 million euros on full-year earnings, 80 million euros of which was charged to the fourth quarter.
The news sent shares of Bayer more than 3 percent lower to 48 euros in Frankfurt morning trade.
The company also said the full-year results were weighed by some 766 million euros in charges, mainly related to the integration of pharmaceutical company Schering which Bayer bought in 2006. Bayer said it doesn't expect to see special charges during the current year.
"We believe the Bayer group is well positioned strategically and on course for success because of the potential our portfolio offers for innovation and growth," said Werner Wenning, the company's chief executive.
"We were successful in a difficult environment, and we are optimistic for the future."
The company said it plans to increase revenue by more than 5 percent in 2010, while earnings before interest, taxes, depreciation and amortization are planned to increase toward 7 billion euros. In 2009, the company's EBITDA stood at 5.8 billion euros.
Bayer missed the market's expectations for EBITDA, but reached its internal target of reducing net debt levels to below 10 billion euros, UniCredit credit analysts said in a research note.
"Earnings in terms of EBITDA before special items are targeted to increase toward 7 billion euros, with core earnings per share expected to improve by about 10 percent. The growth should be driven by health care and crop science, as well as continued recovery of its material science unit," said UniCredit.
The company, famous for its Bayer aspirin, had earned 106 million euros in the October-December period of 2008. Fourth-quarter revenue for the company was nearly unchanged at 7.9 billion euros.
For the full year 2009, the company said net income fell 21 percent to 1.4 billion euros from 1.7 billion euros in 2008, while revenue fell 5.3 percent to 31.2 billion euros from 33 billion euros in 2008.
Bayer said currency effects took a toll of some 140 million euros on full-year earnings, 80 million euros of which was charged to the fourth quarter.
The news sent shares of Bayer more than 3 percent lower to 48 euros in Frankfurt morning trade.
The company also said the full-year results were weighed by some 766 million euros in charges, mainly related to the integration of pharmaceutical company Schering which Bayer bought in 2006. Bayer said it doesn't expect to see special charges during the current year.
"We believe the Bayer group is well positioned strategically and on course for success because of the potential our portfolio offers for innovation and growth," said Werner Wenning, the company's chief executive.
"We were successful in a difficult environment, and we are optimistic for the future."
The company said it plans to increase revenue by more than 5 percent in 2010, while earnings before interest, taxes, depreciation and amortization are planned to increase toward 7 billion euros. In 2009, the company's EBITDA stood at 5.8 billion euros.
Bayer missed the market's expectations for EBITDA, but reached its internal target of reducing net debt levels to below 10 billion euros, UniCredit credit analysts said in a research note.
"Earnings in terms of EBITDA before special items are targeted to increase toward 7 billion euros, with core earnings per share expected to improve by about 10 percent. The growth should be driven by health care and crop science, as well as continued recovery of its material science unit," said UniCredit.
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