) earnings per share during the first quarter of 2012 came in at
€1.68 (approx $2.20) compared to €1.45 (approx. $1.99) in the
year-ago period. Earnings were boosted by strong revenues. Sales
were strong in the emerging markets, with sales improving 6%.
The company recorded a 6.8% (5.2% on an adjusted basis) growth
in revenues to €10,056 million. Growth was witnessed across all
divisions at Bayer.
The three major segments: Healthcare, Crop Science and Material
Science and accounted for approximately 43.2%, 26% and 27.7%,
respectively, of total revenues during the reported quarter.
Revenues from the Crop Science, Healthcare and the Material Science
segments improved by 15.6%, 4.2% and 3.8%, respectively.
The Healthcare segment recorded revenues of €4,342 million in
the first quarter of 2012. Strong sales in the emerging markets
drove growth in this segment. Both sub segments Consumer Health
(adjusted growth of 2.9%) and Pharmaceuticals (adjusted growth of
1.6%) performed well in the reported quarter.
Robust sales of products such as Aspirin Cardio, Nexavar and
Mirena contributed mainly to the rise in sales of the
Pharmaceuticals segment. Blood-thinner Xarelto, co-developed with
the Janssen Research and Development unit of
Johnson & Johnson
), also performed well during the quarter.
Growth in the Consumer Health subgroup, comprising Bayer's
over-the-counter drug business for human beings and animals, was
primarily driven by impressive performances in the emerging
markets. All the sub-groups, Consumer Care, Animal Health and
Medical Care performed well during the quarter.
Sales in the Crop Science division, which develops and markets
chemical crop protection products (insecticides, herbicides, and
fungicides), seeds, and integrated plant biotechnology solutions
for agricultural and non-agricultural uses, recorded sales €2,610
million in the first quarter of 2012.
Strong performances in all the regions, driven by improved
market conditions, led to the strong showing by the segment. All
the sub groups - Environmental Science, BioScience and Crop
Protection unit performed impressively during the quarter.
The Material Science segment, one of the world's largest polymer
manufacturers, was the least impressive performer of the three
segments at Bayer. Segmental sales were €2,788 million. Performance
of the segment was impacted by high raw material costs.
2012 Projection Backed
Apart from releasing financial results, Bayer also reaffirmed
its guidance for 2012. Bayer continues to expect sales in
2012 to come in at approximately €37 billion. While the Healthcare
and Crop Science segments are expected to perform well, the
MaterialScience segment is likely to be impacted by adverse market
conditions resulting in flat year over year sales. Earnings at
Bayer are expected to improve slightly.
We currently have a Neutral recommendation on Bayer in the
long-run. The company carries a Zacks #3 Rank (Hold rating) in the
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