Bayer Lowers 2020 Views After Coronavirus Hit 2Q Performance -- Earnings Review
August 04 2020 - 8:07AM
Dow Jones News
By Kim Richters
Bayer AG reported results for the second quarter on Tuesday.
Here's what you need to know:
SALES: The German chemical and pharmaceutical conglomerate's
quarterly sales came in at 10.05 billion euros ($11.81 billion),
down from EUR10.71 billion year prior. Analysts expected sales of
EUR10.40 billion, according to consensus estimates provided by Vara
Research.
EBITDA BEFORE SPECIAL ITEMS: Earnings before interest, taxes,
depreciation and amortization and before special items rose to
EUR2.88 billion, compared with EUR2.73 billion in the same quarter
the previous year and analysts' expectations of EUR2.74
billion.
NET INCOME: Bayer swung to a net loss of EUR9.55 billion due to
special items for litigations, compared with a profit of EUR404
million a year earlier. Charges included costs for the Roundup
cases as well as provisions for other litigations such as for the
dicamba herbicide, the company said.
WHAT WE WATCHED:
--CORONAVIRUS HIT: Bayer's operational performance was slowed
down by the coronavirus pandemic, analysts at Nord/LB said. The
company's pharmaceuticals and consumer health divisions both
experienced sales and adjusted Ebitda declines, missing consensus
expectations provided by Vara.
--GUIDANCE ADJUSTMENTS: Bayer lowered its outlook for the year.
It now expects sales to be between EUR43 billion and EUR44 billion
and Ebitda before special items of around EUR12.1 billion, both on
a currency-adjusted basis. Analysts at Warburg Research said the
lower guidance doesn't surprise, but that "the current FX dynamics
and their impact on Bayer's results force us to review our
estimates."
--GLYPHOSATE LITIGATION: Bayer continues to expect total costs
of up to $10.9 billion in settling lawsuits related to Roundup and
resolving possible future litigations, saying it remains "strongly
committed to a resolution that simultaneously addresses the current
litigation on reasonable terms and provides a viable solution to
manage and resolve potential future litigation."
Write to Kim Richters at kim.richters@wsj.com
(END) Dow Jones Newswires
August 04, 2020 07:52 ET (11:52 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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