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Bayer (BAYRY) Q2 Earnings In Line, Nubeqa, Kerendia Boost Sales
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Bayer AG (BAYRY - Free Report) reported second-quarter 2024 core earnings of 25 cents per American Depositary Receipt (ADR), on par with the Zacks Consensus Estimate. The company reported earnings of 33 cents per ADR in the year-ago quarter.
Core earnings of €0.94 per share deteriorated 23% year over year due to a decline in earnings at the Crop Science Division.
Total sales in the reported quarter were $12 billion (€11.14 billion), up 0.9% on a reported basis as volume growth of 1.6% and positive pricing impact of 1.5% were partially offset by a 2.2% negative impact of currency.
On a currency and portfolio-adjusted basis, sales increased 3.1% year over year.
Year to date, shares of Bayer have lost 19.2% against the industry’s growth of 18.8%.
Image Source: Zacks Investment Research
All growth rates mentioned below are on a year-over-year basis after adjusting for currency and portfolio changes.
Quarter in Detail
Bayer reports under three segments, namely Crop Science, Pharmaceuticals and Consumer Health.
In the reported quarter, Crop Science sales increased 1.1% to €5 billion, primarily driven by higher sales of glyphosate-based herbicides in North America. Within this segment, Herbicides sales increased 8.7%, driven by volume increases for its glyphosate-based products across all regions. However, sales of non-glyphosate-based products declined in all regions, especially in Latin America (due to adverse weather conditions) and Asia/Pacific (due to falling market prices).
Fungicides sales were down 12.4% because of lower volumes and prices in North and Latin America. Sales of Corn Seed & Traits decreased 2.8% due to lower volumes in Latin and North America amid a decline in planted acreages. Sales from the Soybean Seed & Traits business increased 12.4%, driven by higher volumes in North America.
The Insecticides business also grew 6.9% on the back of higher Movento volumes in the Europe/Middle East/Africa region. The Vegetable Seeds business rose 9%, driven by price increases in all regions.
BAYRY’s revenues in the Pharmaceuticals segment increased 4.5% to €4.6 billion. Nubeqa for cancer and Kerendia for the treatment of patients with chronic kidney disease associated with type II diabetes continued to grow in the reported quarter, along with its Radiology business.
Nubeqa sales surged 90%, recording gains in all regions and witnessing significant improvements in volumes, especially in the United States and EU. Kerendia sales surged 72.9%, mainly due to a substantial rise in volumes in the United States, along with business expansion in China.
However, sales of oral anticoagulant Xarelto, co-developed with J&J (JNJ - Free Report) , decreased 10.6% due to competitive pressure from generics, especially in Canada and Europe.
In the U.S. market, Xarelto is marketed by J&J. Bayer earns license revenues from JNJ for Xarelto sales in the United States. The top line declined year over year.
Sales of the ophthalmology drug, Eylea, increased 7.7%, driven by strong growth with contributions from all regions, mainly due to higher volumes in Japan and Canada. Please note that Bayer’s HealthCare unit co-develops Eylea with Regeneron (REGN - Free Report) , which records net product sales of Eylea in the United States. BAYRY records net product sales of Eylea outside the country. REGN records its share of profits/losses in connection with sales of Eylea outside the United States.
Consumer Health sales rose 5.3% to €1.46 billion, driven by increases in Dermatology (+13.8%) and Nutritionals (+11.8%) categories and strong growth in Digestive Health amid an improved supply situation. Allergy & Cold business was down 17.6% due to a weaker season. Dermatology sales gained from continued strong demand for Bepanthen.
2024 Guidance Updated
Bayer reiterated its previously provided currency-adjusted guidance for 2024 for the total group. The company expects to generate sales in the range of €47-€49 billion.
For the Crop Science Division, Bayer now expects currency and portfolio-adjusted sales growth to come in at the lower end of the projected range (between -1% and +3%). For the Pharmaceuticals Division, Bayer has upgraded its projection for currency and portfolio-adjusted sales growth between 0% and 3% (previously: down -4% to flat year over year).
Our Take
Although Bayer’s earnings declined in the second quarter due to an unfavorable product mix at the Crop Science division, sales growth was encouraging in all divisions. New products, Nubeqa and Kerendia, retained their impressive momentum in the Pharmaceutical division and offset the negative impact of a decline in Xarelto sales. Consumer Health business returned to growth. Crop Science business also posted growth in a challenging agricultural market environment.
The pipeline progress in the Pharmaceutical business is good. The company is working to expand the labels of its key drugs, Nubeqa and Kerendia, which should boost growth. BAYRY also plans to launch two new drugs (as early as next year) — elinzanetant, a non-hormonal solution for women suffering from vasomotor symptoms associated with menopause, and acoramidis, a cardiology drug.
The successful development of new drugs is imperative for Bayer amid multiple challenges. The failure of a late-stage study on asundexian was a major setback for the company. BAYRY had earlier slashed dividends to conserve cash as increasing Roundup litigation charges adversely impacted the bottom line.
Image: Bigstock
Bayer (BAYRY) Q2 Earnings In Line, Nubeqa, Kerendia Boost Sales
Bayer AG (BAYRY - Free Report) reported second-quarter 2024 core earnings of 25 cents per American Depositary Receipt (ADR), on par with the Zacks Consensus Estimate. The company reported earnings of 33 cents per ADR in the year-ago quarter.
Core earnings of €0.94 per share deteriorated 23% year over year due to a decline in earnings at the Crop Science Division.
Total sales in the reported quarter were $12 billion (€11.14 billion), up 0.9% on a reported basis as volume growth of 1.6% and positive pricing impact of 1.5% were partially offset by a 2.2% negative impact of currency.
On a currency and portfolio-adjusted basis, sales increased 3.1% year over year.
Year to date, shares of Bayer have lost 19.2% against the industry’s growth of 18.8%.
Image Source: Zacks Investment Research
All growth rates mentioned below are on a year-over-year basis after adjusting for currency and portfolio changes.
Quarter in Detail
Bayer reports under three segments, namely Crop Science, Pharmaceuticals and Consumer Health.
In the reported quarter, Crop Science sales increased 1.1% to €5 billion, primarily driven by higher sales of glyphosate-based herbicides in North America. Within this segment, Herbicides sales increased 8.7%, driven by volume increases for its glyphosate-based products across all regions. However, sales of non-glyphosate-based products declined in all regions, especially in Latin America (due to adverse weather conditions) and Asia/Pacific (due to falling market prices).
Fungicides sales were down 12.4% because of lower volumes and prices in North and Latin America. Sales of Corn Seed & Traits decreased 2.8% due to lower volumes in Latin and North America amid a decline in planted acreages. Sales from the Soybean Seed & Traits business increased 12.4%, driven by higher volumes in North America.
The Insecticides business also grew 6.9% on the back of higher Movento volumes in the Europe/Middle East/Africa region. The Vegetable Seeds business rose 9%, driven by price increases in all regions.
BAYRY’s revenues in the Pharmaceuticals segment increased 4.5% to €4.6 billion. Nubeqa for cancer and Kerendia for the treatment of patients with chronic kidney disease associated with type II diabetes continued to grow in the reported quarter, along with its Radiology business.
Nubeqa sales surged 90%, recording gains in all regions and witnessing significant improvements in volumes, especially in the United States and EU. Kerendia sales surged 72.9%, mainly due to a substantial rise in volumes in the United States, along with business expansion in China.
However, sales of oral anticoagulant Xarelto, co-developed with J&J (JNJ - Free Report) , decreased 10.6% due to competitive pressure from generics, especially in Canada and Europe.
In the U.S. market, Xarelto is marketed by J&J. Bayer earns license revenues from JNJ for Xarelto sales in the United States. The top line declined year over year.
Sales of the ophthalmology drug, Eylea, increased 7.7%, driven by strong growth with contributions from all regions, mainly due to higher volumes in Japan and Canada. Please note that Bayer’s HealthCare unit co-develops Eylea with Regeneron (REGN - Free Report) , which records net product sales of Eylea in the United States. BAYRY records net product sales of Eylea outside the country. REGN records its share of profits/losses in connection with sales of Eylea outside the United States.
Consumer Health sales rose 5.3% to €1.46 billion, driven by increases in Dermatology (+13.8%) and Nutritionals (+11.8%) categories and strong growth in Digestive Health amid an improved supply situation. Allergy & Cold business was down 17.6% due to a weaker season. Dermatology sales gained from continued strong demand for Bepanthen.
2024 Guidance Updated
Bayer reiterated its previously provided currency-adjusted guidance for 2024 for the total group. The company expects to generate sales in the range of €47-€49 billion.
For the Crop Science Division, Bayer now expects currency and portfolio-adjusted sales growth to come in at the lower end of the projected range (between -1% and +3%). For the Pharmaceuticals Division, Bayer has upgraded its projection for currency and portfolio-adjusted sales growth between 0% and 3% (previously: down -4% to flat year over year).
Our Take
Although Bayer’s earnings declined in the second quarter due to an unfavorable product mix at the Crop Science division, sales growth was encouraging in all divisions. New products, Nubeqa and Kerendia, retained their impressive momentum in the Pharmaceutical division and offset the negative impact of a decline in Xarelto sales. Consumer Health business returned to growth. Crop Science business also posted growth in a challenging agricultural market environment.
The pipeline progress in the Pharmaceutical business is good. The company is working to expand the labels of its key drugs, Nubeqa and Kerendia, which should boost growth. BAYRY also plans to launch two new drugs (as early as next year) — elinzanetant, a non-hormonal solution for women suffering from vasomotor symptoms associated with menopause, and acoramidis, a cardiology drug.
The successful development of new drugs is imperative for Bayer amid multiple challenges. The failure of a late-stage study on asundexian was a major setback for the company. BAYRY had earlier slashed dividends to conserve cash as increasing Roundup litigation charges adversely impacted the bottom line.
Zacks Rank
BAYRY currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.