Bayer Corp. revenue, sales rise but net income falls
Jul 30, 2010 (Pittsburgh Post-Gazette - McClatchy-Tribune Information Services via COMTEX) --
Copyright (C) 2010, Pittsburgh Post-Gazette
Strong demand for its plastics and chemical materials boosted revenue growth at Bayer Corp. by 15 percent in the second quarter, but net income slipped by 1.3 percent because of one-time legal charges and the cost of a write-down on a cancer drug.
The German-based chemicals and pharmaceuticals maker said sales shot up by nearly 15 percent to $12 billion. Net income dropped to $686 million from $695 million a year ago, missing analysts' average estimates of $1 billion.
Bayer has about 2,800 workers in the Pittsburgh region including those at its U.S. headquarters in Robinson and at Medrad, a medical device maker based in Marshall.
Sales in the material sciences soared by 47 percent worldwide for the quarter and by 51 percent in North America. That segment "has left the crisis behind and saw business expand more strongly than expected," Bayer Chairman Werner Wenning said in a statement.
Strong gains in material sciences offset increases in health care and crop sciences that came in below forecast, he said. Health care sales grew by 6 percent and benefited from significant gains by hemophilia drug Kogenate, antibiotic Avalox/Avelox and cancer drug Nexavar. However, sales of Yaz-brand birth control pills fell by 15 percent mainly because of increased competition from generics marketed in the United States by Teva Pharmaceutical Industries. Bayer sued Teva in June for patent infringement on the product.
Crop science sales rose by 1.7 percent but were hurt by bad weather in Europe and competitive prices from generics in North America.
The one-time charges included $161 million related to lawsuits involving the health care and crop science units; and $173 million for costs to write down the value of Zevalin, a drug that treats lymphoma.
For the rest of 2010, Mr. Wenning said he expected the global economy to continue to improve and said the company was sticking with an earlier forecast of adjusted sales growth of 5 percent for combined group sales. But Bayer raised its outlook for the material science business, saying it would exceed previous forecasts of 20 percent growth for the year.
Joyce Gannon: jgannon@post-gazette.com or 412-263-1580.
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