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Bayer (BAYRY) Q2 Earnings Miss Estimates, '23 Outlook Lowered
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Bayer AG (BAYRY - Free Report) reported lower-than-expected second-quarter 2023 results. Core earnings of 33 cents per American Depositary Receipt (“ADR”) missed the Zacks Consensus Estimate of 39 cents. The company delivered earnings of 51 cents per ADR in the year-ago quarter.
Total sales in the second quarter were $12 billion, missing the Zacks Consensus Estimate of $13.5 billion. Revenues were down from the $13.6 billion reported in the year-ago quarter.
Shares of Bayer have gained 12% in the year so far compared with the industry’s growth of 2.1%.
Image Source: Zacks Investment Research
All growth rates mentioned below are on a year-over-year basis after adjusting for currency and portfolio changes.
Quarter in Detail
Bayer reports under three segments, namely Crop Science, Pharmaceuticals and Consumer Health.
Crop Science sales were €4.9 billion, down 18.5% from the year-ago quarter due to lower volumes and prices for glyphosate-based products particularly in North America. Revenues missed our model estimate of €6.4 billion.
Sales of Corn Seed & Traits were up 10.6% year over kyear to €1.2 billion due to higher prices in all regions as well as increased acreages in North America. However, the herbicide business declined 45.6% to €1.3 billion due to lower volumes and decreased prices for glyphosate-based products.
Sales of Fungicides were down 0.4% as increased prices in all regions and higher volumes in North America were mainly offset by lower volumes due to unfavorable weather in other geographies and perceived shifts in demand into the third quarter in Latin America. Sales of Soybean Seed & Traits were down 9.3% year over year to €446 million.
Revenues in the Pharmaceuticals segment were up 0.2% year over year to €4.5 billion in the reported quarter. Revenues missed our model estimate of €4.6 billion. Sales declined in China due to the tender procedure, especially for Adalat and lower demand for Aspirin cardio.
Sales of the oral anticoagulant Xarelto were down 3.3% to €1 billion as business was impacted by competitive pressure from generic products as well as lower prices, particularly in Asia/Pacific and Latin America.
The oncology drug Nubeqa increased by 95.7% to €201 million on significant volume increases in the United States and Europe. Ophthalmology drug Eylea sales increased 5.6% to €814 million, driven by higher volumes in all regions and particularly in North America and Asia/Pacific.
Kerendia (chronic kidney disease associated with type 2 diabetes) sales surged significantly following its successful market launch in the United States.
Please note that Bayer’s HealthCare unit co-develops Eylea with Regeneron (REGN - Free Report) . 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. Bayer co-develops Xarelto with J&J.
Consumer Health sales increased 5.4% year over year to €1.5 billion as dermatology business sales increased. Revenues were in line with our model estimate. Sales of cough, cold and allergy products gained 5.7% amid a persistently strong cold season.
Dermatology sales increased 10.9% to €337 million, driven by continued strong demand for Bepanthen. Sales in the Nutritionals category gained 1%.
Bayer Aktiengesellschaft Price, Consensus and EPS Surprise
Bayer lowered its annual outlook due to a further significant decline in sales of glyphosate-based products.
For 2023, the company expects to generate currency-adjusted sales of €48.5-€49.5 billion (previous guidance: €51-€52 billion). The updated outlook indicates a decline of 2% to 3% on a currency- and portfolio-adjusted basis (previous forecast: increase of 2% to 3%).
Core earnings per share are projected at around €6.20 to €6.40 on a currency-adjusted basis (previous guidance: €7.20 to €7.40).
Bayer guided for a sales decline of around 5% at Crop Science, Pharmaceuticals roughly flat year over year and 5% sales growth for the Consumer Health division (after adjusting for currency and portfolio changes).
Earnings estimates for NVO for 2023 are up by 20 cents to $5.27 in the last sixty days. Nordisk surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 0.35%.
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Bayer (BAYRY) Q2 Earnings Miss Estimates, '23 Outlook Lowered
Bayer AG (BAYRY - Free Report) reported lower-than-expected second-quarter 2023 results. Core earnings of 33 cents per American Depositary Receipt (“ADR”) missed the Zacks Consensus Estimate of 39 cents. The company delivered earnings of 51 cents per ADR in the year-ago quarter.
Total sales in the second quarter were $12 billion, missing the Zacks Consensus Estimate of $13.5 billion. Revenues were down from the $13.6 billion reported in the year-ago quarter.
Shares of Bayer have gained 12% in the year so far compared with the industry’s growth of 2.1%.
Image Source: Zacks Investment Research
All growth rates mentioned below are on a year-over-year basis after adjusting for currency and portfolio changes.
Quarter in Detail
Bayer reports under three segments, namely Crop Science, Pharmaceuticals and Consumer Health.
Crop Science sales were €4.9 billion, down 18.5% from the year-ago quarter due to lower volumes and prices for glyphosate-based products particularly in North America. Revenues missed our model estimate of €6.4 billion.
Sales of Corn Seed & Traits were up 10.6% year over kyear to €1.2 billion due to higher prices in all regions as well as increased acreages in North America. However, the herbicide business declined 45.6% to €1.3 billion due to lower volumes and decreased prices for glyphosate-based products.
Sales of Fungicides were down 0.4% as increased prices in all regions and higher volumes in North America were mainly offset by lower volumes due to unfavorable weather in other geographies and perceived shifts in demand into the third quarter in Latin America. Sales of Soybean Seed & Traits were down 9.3% year over year to €446 million.
Revenues in the Pharmaceuticals segment were up 0.2% year over year to €4.5 billion in the reported quarter. Revenues missed our model estimate of €4.6 billion. Sales declined in China due to the tender procedure, especially for Adalat and lower demand for Aspirin cardio.
Sales of the oral anticoagulant Xarelto were down 3.3% to €1 billion as business was impacted by competitive pressure from generic products as well as lower prices, particularly in Asia/Pacific and Latin America.
The oncology drug Nubeqa increased by 95.7% to €201 million on significant volume increases in the United States and Europe. Ophthalmology drug Eylea sales increased 5.6% to €814 million, driven by higher volumes in all regions and particularly in North America and Asia/Pacific.
Kerendia (chronic kidney disease associated with type 2 diabetes) sales surged significantly following its successful market launch in the United States.
Please note that Bayer’s HealthCare unit co-develops Eylea with Regeneron (REGN - Free Report) . 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. Bayer co-develops Xarelto with J&J.
Consumer Health sales increased 5.4% year over year to €1.5 billion as dermatology business sales increased. Revenues were in line with our model estimate. Sales of cough, cold and allergy products gained 5.7% amid a persistently strong cold season.
Dermatology sales increased 10.9% to €337 million, driven by continued strong demand for Bepanthen. Sales in the Nutritionals category gained 1%.
Bayer Aktiengesellschaft Price, Consensus and EPS Surprise
Bayer Aktiengesellschaft price-consensus-eps-surprise-chart | Bayer Aktiengesellschaft Quote
2023 Guidance Lowered
Bayer lowered its annual outlook due to a further significant decline in sales of glyphosate-based products.
For 2023, the company expects to generate currency-adjusted sales of €48.5-€49.5 billion (previous guidance: €51-€52 billion). The updated outlook indicates a decline of 2% to 3% on a currency- and portfolio-adjusted basis (previous forecast: increase of 2% to 3%).
Core earnings per share are projected at around €6.20 to €6.40 on a currency-adjusted basis (previous guidance: €7.20 to €7.40).
Bayer guided for a sales decline of around 5% at Crop Science, Pharmaceuticals roughly flat year over year and 5% sales growth for the Consumer Health division (after adjusting for currency and portfolio changes).
Zacks Rank & Another Stock to Consider
Bayer currently carries a Zacks Rank #3 (Hold).
A stock worth considering in the large-cap pharma sector is Novo Nordisk (NVO - Free Report) , which carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings estimates for NVO for 2023 are up by 20 cents to $5.27 in the last sixty days. Nordisk surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 0.35%.