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Bayer boosts earnings
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November 11, 1998: 5:57 a.m. ET
3rd quarter earnings at drug maker rise, boosted by growth in U.S. and Europe
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LONDON (CNNfn) - Net profit at Bayer, Germany's second-largest drug and chemical company, rose 7.8 percent in the third quarter despite a drop in sales.
The maker of Bayer Aspirin's net income rose to 681 million marks ($405 million) for the three months ending in September. It took the company's net income for the first nine months of the year to 2.409 billion marks, an increase of 2.4 percent.
But sales fell for the quarter, down 6.4 percent compared to the same period last year to 13 billion marks.
"The world economy has lost much of its momentum and that has affected us too," said Bayer AG chief executive Manfred Schneider in a statement.
He blamed the Asian crisis -- sales fell by 900 million marks in the region -- and price pressures for the fall in sales. Divestments also wiped out 200 million marks from the total.
But higher profits in the U.S. and Europe helped compensate for that shortfall.
Analysts were divided on whether the results were a good performance in a weak market or worse than expected.
"These number were below our pretty cautious forecasts," said Dresdner Kleinwort Benson European chemicals analyst Peter Mackay. "The pharmaceutical business and Agro (chemical) business should give them some resilience but as they highlighted themselves, the healthcare business has stagnated."
But another analyst was more upbeat. "This was a solid and robust performance," he said. "Quite clearly everyone in the industry is suffering from the slowdown and a difficult pricing environment."
Bayer hopes to list its Agfa camera film business on the stock exchange as an independent company and concentrate on its core businesses of life sciences, polymers and specialty chemicals.
Bayer was up one mark to 65.75 marks in morning trade in Frankfurt.
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