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Bayer (BAYRY) Earnings & Revenues Surpass Estimates in Q2

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Bayer AG (BAYRY - Free Report) reported second-quarter 2022 core earnings of 51 cents per American Depositary Receipt (ADR), which beat the Zacks Consensus Estimate of 46 cents. The company had reported earnings of 48 cents per ADR in the year-ago quarter.

Total sales in the second quarter were $13.59 billion, up from $13.08 billion in the year-ago quarter. Revenues increased year over year owing to strong growth in the Crop Science and Consumer Health division. Sales also beat the Zacks Consensus Estimate of $12.28 billion.

Shares of Bayer have rallied 13.1% in the year so far compared with the industry’s growth of 2.1%.

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

Bayer started reporting under three segments since the fourth quarter of 2019 — Pharmaceuticals, Consumer Health and Crop Science.

In the second quarter of 2022, Crop Science sales were €6.46 billion, up 17.2% from the year-ago quarter, driven by a substantial improvement in the market environment. Herbicide sales jumped 51.3% as a result of glyphosate-based products’ prices remaining high in all regions. Sales of Corn Seed & Traits were up 9.5% year over year, driven by price gains in all regions, as well as volume gains in ex-U.S. markets.

However, sales of Soybean Seed & Traits decreased 16.1% year over year, owing to a significant reduction in sales in North America.

Revenues in the Pharmaceuticals segment rose 2.1% year over year to €4.81 billion in the reported quarter, owing to higher sales of ophthalmology drug, Eylea, the newly launched cancer drug, Nubeqa, as well as other marketed drugs. Please note that Bayer’s HealthCare unit co-develops Eylea with Regeneron (REGN - Free Report) .

Eylea sales increased 11.7%, driven by strong growth as a result of high demand in all regions. Regeneron records net product sales of Eylea in the United States. Bayer records net product sales of Eylea outside the United States. REGN records its share of profits/losses in connection with sales of Eylea outside the United States.

However, oral anticoagulant, Xarelto, which Bayer co-develops with J&J (JNJ - Free Report) , witnessed a substantial decline in global sales. Sales of Xarelto were also impacted by the expiration of the patent in Brazil.

J&J is facing patent challenges in the United States for Xarelto and some of its other drugs. JNJ is also working on Xarelto’s label expansion.

Consumer Health sales increased 6.8% year over year to €1.49 billion in the second quarter, owing to strong growth across all regions. The business benefited from the launch of innovative products. The Allergy & Cold category also registered robust sales growth of 16.9%. However, sales in the Nutritionals business decreased 3.7%.

2022 Guidance

Owing to strong business development during the first half of 2022, Bayer raised the guidance it provided earlier this year.

The company now expects to generate core earnings per share of €7.30 in 2022 compared with the previous expectation of €7 per share.

The company now expects to generate sales of €47–€48 billion in 2022 compared with the previous expectation of €46 billion.

Bayer AG Price, Consensus and EPS Surprise

Bayer Aktiengesellschaft Price, Consensus and EPS Surprise

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

Zacks Rank & Stock to Consider

Bayer currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the biotech sector is Precision BioSciences, Inc. (DTIL - Free Report) , which has a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Precision BioSciences’ loss per share estimates narrowed 5.8% for 2022 and 16.2% for 2023 in the past 60 days.

Earnings of Precision BioSciences have surpassed estimates in each of the trailing four quarters. DTIL delivered an earnings surprise of 76.15%, on average.