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Bayer's (BAYRY) Q2 Earnings & Revenues Surpass Estimates

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Bayer AG (BAYRY - Free Report) reported second-quarter 2021 core earnings of 48 cents per American Depositary Receipt (ADR), which beat the Zacks Consensus Estimate of 47 cents and also increased from the year-ago quarter’s earnings of 44 cents per share.

Total sales in the second quarter were $13.07 billion, up from $11.06 billion in the year-ago quarter. Sales also beat the Zacks Consensus Estimate of $11.83 billion.

Shares of Bayer have plunged 7% in the year so far against the industry’s growth of 14%.

Zacks Investment Research
Image Source: Zacks Investment Research

All growth rates mentioned below are on a year-over-year basis and after adjusting for currency and portfolio changes.

Quarter in Detail

The company started reporting under three segments — Pharmaceuticals, Consumer Health and Crop Science — from the fourth quarter of 2019. Please note that the company had announced divestment of its Animal Health business to Elanco in 2019 and reports the segment under discontinued operations.

In the reported quarter, Crop Science sales were €5.021 billion, up 10.6% from the year-ago quarter, driven by strong growth in the Latin America and Asia/Pacific markets, as well as significant growth in North America. Fungicides and Herbicide sales increased 22.9% and 16.2%, respectively, as a result of volume gains in all regions besides higher prices. Business also improved at Vegetable Seeds. Sales of Corn Seed & Traits increased 8.6% year over year on increased volumes in Latin America and higher prices in North America.

Revenues in the Pharmaceuticals segment surged 16.2% to €4.494 billion in the second quarter owing to robust recovery from the COVID-19-induced restrictions. Other products, such as the oral anticoagulant Xarelto, co-developed with J&J (JNJ - Free Report) , and newly launched cancer drug Nubeqa, also contributed to growth. Xarelto sales increased 12.6%, mainly as a result of higher volumes in China and Russia. Sales of the ophthalmology drug, Eylea, increased 27.4%, driven by strong growth as a result of high demand in Europe. Please note that Bayer’s HealthCare unit co-develops Eylea with Regeneron (REGN - Free Report) .

Consumer Health sales were up 12.8% year over year to €1.290 billion in the second quarter, primarily due to protective measures introduced in various regions due to the ongoing lockdowns. Business benefited from continued high demand in Nutritionals and a strong allergy season in North America.

2021 Guidance

Bayer upgraded its financial guidance for full-year 2021 following a strong business performance in the first half of the year. The company now expects to post sales of approximately €44 billion for 2021 compared with the previous guidance of about €42-€43 billion. The Zacks Consensus Estimate for the same stands at $49.70 billion.

Bayer now expects to generate core earnings per share of about €6.40 to €6.60 compared with the previous expectation of €6.10 to €6.30.

In a separate press release, Bayer announced that it has acquired U.S.-based biopharmaceutical company, Vividion Therapeutics, Inc., for $2 billion. Bayer will make an upfront payment of $1.5 billion and potential milestone payments of up to $500 million. With this acquisition, the company is looking to boost its drug discovery capabilities and its reach into new modalities.

Bayer Aktiengesellschaft Price, Consensus and EPS Surprise

Bayer Aktiengesellschaft Price, Consensus and EPS Surprise

Bayer Aktiengesellschaft price-consensus-eps-surprise-chart | Bayer Aktiengesellschaft Quote

Zacks Rank & Stock to Consider

Bayer currently carries a Zacks Rank #3 (Hold). A top-ranked stock in the healthcare sector is Vertex Pharmaceuticals Incorporated (VRTX - Free Report) , which has a Zacks Rank #1 (Strong Buy) at present. You can see  the complete list of today’s Zacks #1 Rank stocks here.

Vertex’s earnings estimates have been revised 9.4% upward for 2021 and 5.5% upward for 2022 over the past 60 days.