Germany’s Bayer was climbing back onto solid ground this morning after it revealed strong increases in both sales and earnings for the first quarter of the year, putting a smile on the face of investors.
Sales jumped almost 16% to 6.7 billion euros, helping Bayer’s operating result spiral upwards more than 50% to 1.1 billion euros. Even after a one-time charge of 138 million was accounted for, this figure jumped 33% to just over 1 billion euros, while net income was catapulted forward 56% to 652 million euros. The business was driven by Bayer’s material science unit and – after a tumultuous period for healthcare following the 2001 withdrawal of the cholesterol-lowering drug Baycol/Lipobay (cerivastatin [[08/08/01a]]) – the unit’s underlying operating result also edged forward in the right direction. Bayer says it “more than offset” the decline in sales of its once top-selling antibiotic Cipro (ciprofloxacin) – following a patent expiry in the US [[11/06/04e]] – and the special charges in connection with the acquisition of Roche’s over the counter business [[22/11/04c]].
In an understated fashion, chairman Werner Wenning called the results “very pleasing,” and pointed to the successful spin off of Lanxess [[11/01/05f]], a sales link-up with Schering-Plough [[13/09/04b]], as well as progress made in repositioning the healthcare portfolio. “Our pharmaceutical research activities will focus in the future on cardiovascular risk management – including diabetes – and cancer,” Wenning added. “We are confident that concentrating on these areas will allow us to sustainably increase the productivity of our pharmaceutical R&D.” For 2005 Bayer is targeting a more than 5% increase in sales to over 25 billion euros, while the operating result is expected to jump around 20% despite a rise in raw material costs.
