) earnings during the fourth quarter of 2012 came in at €1.00 per
share (approx $1.30) compared with €0.97 (approx. 72 cents) per
share in the year-ago period. Earnings benefited from higher
Bayer recorded 7.3% (5.5% on an adjusted basis) growth in
revenues to €9.9 billion. Growth was witnessed across all the
major divisions at Bayer, but the increase was primarily driven
by the Crop Science segment.
The company reported earnings of €5.35 per share (approx
$6.88) for full year 2012 compared with €4.83 (approx. $6.72) per
share in the year-ago period. Bayer recorded 8.8% (5.3% on an
adjusted basis) growth in revenues to €39.8 billion in the year
Segmental Performance During the Quarter
The three major segments - Healthcare, Crop Science and
Material Science - accounted for approximately 49.9%, 18.8% and
28%, respectively, of total revenues during the fourth quarter of
2012. Revenues from the Crop Science, Healthcare and the Material
Science segments improved by 9.1%, 5.1% and 4.8%,
The Healthcare segment recorded revenues of €4.9 billion in
the reported quarter. Both sub-segments, Consumer Health
(adjusted growth of 5.4%) and Pharmaceuticals (adjusted growth of
4.8%) performed well in the quarter.
Sales growth in North America and emerging economies like
China boosted 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
the impressive performance of the Consumer Care division.
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 €1.9 billion in the fourth quarter of
2012. Sales in this segment benefited from higher volumes. The
Crop Science segment exhibited solid growth in all the regions,
particularly in Latin America.
The Material Science segment, one of the world's largest
polymer manufacturers, posted impressive sales of €2.8 billion in
the reported quarter. Volume growth and price increase was
primarily responsible for the impressive performance of the
segment during the reported quarter.
Apart from releasing its financial results, Bayer provided its
guidance for 2013. Earnings are expected to increase in the high
single-digit percentage year over year. Bayer expects 2013 Group
sales to be around €41 billion.
The Healthcare segment of the company is expected to
successfully commercialize new pharmaceutical products. The new
products are expected to contribute around €1 billion in 2013 and
around €2.5 billion in 2015. Revenues from the Healthcare segment
are expected to increase to €19 billion (mid single-digit growth)
and reach €22 billion by 2015.
Both Consumer Health and Pharmaceuticals sales are expected to
exhibit mid-single-digit sales growth in 2013. The company
expects Consumer Health to generate around €8 billion in 2013 and
around €9 billion in 2015, whereas Pharmaceuticals sales are
expected to be around €11 billion in 2013 and €13 billion in
Crop Science segment sales are also expected to rise in 2013.
The company expects the segment's sub-groups to grow in the
high-single-digit percentage range to around €9 billion in 2013.
The segment's sales in 2015 are expected to be around €10
Material Science segment revenues are expected to increase
marginally over 2012 levels. Bayer's operating expenses in 2013
are also expected to increase.
Bayer recently received encouraging news from the US Food and
Drug Administration (FDA) when the latter cleared Stivarga
(regorafenib) for an additional indication. Stivarga was
previously approved in the US for treating patients suffering
from metastatic colorectal cancer (mCRC).
The drug is now also approved for the treatment of patients
suffering from locally advanced, unresectable or metastatic
gastrointestinal stromal tumor (GIST), previously treated with
) Gleevec (imatinib mesylate) and
) Sutent (sunitinib malate).
Bayer, a larger-cap pharma stock, currently carries a Zacks
Rank #2 (Buy). Another large cap pharma stock
Eli Lilly and Company
) also carries a comparable rank.
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