Bayer Warns on Crop Weakness as Roundup Plaintiffs Rise
July 30 2019 - 3:25AM
Dow Jones News
By Sara Germano and Ruth Bender
BERLIN -- Bayer AG warned that severe weather impacting its
crop-science division could strain its ability to hit full-year
sales targets, further highlighting troubles following the
acquisition of Monsanto last year.
Meanwhile, the German chemical and pharmaceutical giant said the
number of plaintiffs suing over its Roundup herbicide rose by
another 5,000 over the last three months, highlighting the
difficulty in putting to rest what so far has been a damaging legal
battle over the world's most widely used weedkiller.
Bayer is grappling with the effects of what analysts say has
been one of the worst crop planting seasons in the U.S. on record.
The company reported a 49% drop in net income for the quarter ended
in June, driven by the extreme weather across the U.S., Canada and
Europe that hurt the crop-science division, Bayer's largest unit by
sales.
The company said Tuesday challenges in its crop business makes
achieving its full-year performance outlook "increasingly
ambitious."
Overall sales grew 21% to EUR11.5 billion ($12.81 billion),
boosted from its acquisition of Monsanto last June. Profit fell by
nearly half to EUR404 million, as a wet planting season delayed
farmers from getting their corn crop in the ground while dry
weather across Europe and Canada has been hitting demand for
herbicides and fungicides.
Bayer has been entangled in a protracted and potentially costly
legal battle, pitching it against thousands of cancer patients
claiming Monsanto-invented Roundup weedkillers cause cancer. The
number of plaintiffs rose to 18,400 in the latest quarter, up from
13,400 in April, Bayer said.
The Leverkusen, Germany-based inventor of Aspirin has lost
almost 40% of its market value since acquiring Monsanto on fears
that the lawsuits will cost the company several billions of dollars
and are clouding plans to boost profits by expanding in the
agriculture sector.
So far Bayer lost the three first jury verdicts in the U.S. with
awards reaching as high as $2 billion, though last week a
California judge reduced that penalty to $86.7 million.
Bayer is appealing the verdicts and argues that Roundup and its
active ingredient glyphosate are safe.
Write to Sara Germano at sara.germano@wsj.com and Ruth Bender at
Ruth.Bender@wsj.com
(END) Dow Jones Newswires
July 30, 2019 03:10 ET (07:10 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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