Bayer AG BAYRY reported fourth-quarter 2024 core earnings of 28 cents per American Depositary Receipt (ADR), in line with the Zacks Consensus Estimates. The company reported earnings of 50 cents per ADR in the year-ago quarter.
Core earnings of €1.05 per share deteriorated 43.2% year over year due to the decline in earnings in the Crop Science and Pharmaceuticals divisions.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Total sales in the reported quarter were $12.5 billion (€11.7 billion), down 1.1% on a reported basis. The reported figure beat the Zacks Consensus Estimate of $12.02 billion.
On a currency and portfolio-adjusted basis, sales increased 0.1% year over year.
Shares of Bayer have lost 14.3% in the past year against the industry’s growth of 2.4%.
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All growth rates mentioned below are on a year-over-year basis after adjusting for currency and portfolio changes.
BAYRY’s Q4 Results in Detail
Bayer reports under three segments, namely Crop Science, Pharmaceuticals and Consumer Health.
In the reported quarter, Crop Science sales decreased 2.3% to €5.4 billion. This business was under pressure in 2024 due to lower prices in the crop protection business, caused by competitive pricing pressure.
Within this segment, Herbicides business was down 7.7% as glyphosate-based product sales were adversely impacted by significantly lower market prices year on year, especially in Latin America.
Fungicide sales were down 6.4% due to price declines in Latin America and lower volumes in the Europe/Middle East/Africa region amid adverse weather and market conditions.
Corn Seed & Traits sales decreased 2.6% due to planted area declining in Latin and North America. Sales from the Soybean Seed & Traits business declined 0.4%. The Insecticides business grew 7.9% due to higher Movento sales in the Europe/Middle East/Africa region and a significant increase in volumes in Latin America. Sales at Cotton Seed were up 27% due to volume increases in the Asia/Pacific region on account of higher planted area. The Vegetable Seeds business was up 5.2% due to price hikes across all regions.
BAYRY’s revenues in the Pharmaceuticals segment increased 2.4% to €4.6 billion. Nubeqa (for cancer) sales surged 73.4% to €443 million, recording gains in all regions and witnessing significant improvements in volumes, especially in the United States and EU. Kerendia sales surged 62%, mainly due to a substantial rise in volumes in the United States and business expansion in China.
However, sales of oral anticoagulant Xarelto, co-developed with J&J JNJ, decreased 18.6% to €848 million due to competitive pressure from generics, especially in Canada and Europe.
In the U.S. market, Xarelto is marketed by J&J. Bayer earns license revenues from JNJ for Xarelto sales in the United States.
Sales of the ophthalmology drug, Eylea, increased 0.9% to €833 million, driven by higher volumes and prices. The launch of Eylea 8 mg, offering longer treatment intervals, provided a boost to sales, especially in Japan and Europe.
Please note that Bayer’s HealthCare unit co-develops Eylea with Regeneron REGN, which records net product sales of Eylea in the United States. BAYRY records net product sales of Eylea outside the country. REGN records its share of profits/losses in connection with the sales of Eylea outside the United States. Sales of the Mirena product family (long-term contraceptive) gained 24.5%, largely driven by higher prices in the country.
Consumer Health sales lost 0.9% to €1.6 billion due to declines in Nutritionals (-4.3%) and Allergy & Cold (-12.7%) business. Nonetheless, Dermatology sales (+8.1%) gained from continued strong demand for Bepanthen.
Pain & Cardio (+6.5%) and Digestive Health (+5.7%) categories boosted growth for the Consumer Health business.
BAYRY’s 2024 Results
Revenues totaled $50.4 billion, which beat the Zacks Consensus Estimate of $48.94 billion. On a reported basis, revenues amounted to €46.6 billion, well within the company’s revised guidance of €45.5-€47.5 billion.
Core earnings per ADR of $1.36 beat the Zacks Consensus Estimate of $1.31. Core EPS of €5.05 was also well within the company’s guidance of €4.80-€5.20.
BAYRY’s 2025 Guidance
Bayer expects to generate sales in the range of €45-€47 billion in 2025. For the Crop Science Division, it expects currency and portfolio-adjusted sales growth of around -2% to +2%. For the Pharmaceuticals Division, Bayer expects currency and portfolio-adjusted sales growth of around -4% to -1%. Consumer Health sales growth is projected to increase between 2% and 5%.
Core EPS is projected to be in the band of €4.50-€5.
Bayer Aktiengesellschaft Price, Consensus and EPS Surprise
In January, BAYRY announced positive top-line results from its phase III OASIS 4 study. Elinzanetant met all primary and secondary endpoints in the treatment of moderate to severe vasomotor symptoms caused by adjuvant endocrine therapy in women with breast cancer or at high risk of developing breast cancer. The candidate is currently under review in the United States and the EU.
Bayer has also submitted regulatory approval applications in the United States and China for finerenone for the treatment of adult patients with heart failure with a left ventricular ejection fraction (LVEF) of ≥40%, i.e., with mildly reduced LVEF (HFmrEF) or preserved LVEF (HfpEF).
Our Take on BAYRY's Performance
Bayer’s performance in the fourth quarter was better than in the previous quarters. 2024 was a tough year for the company due to strong headwinds in the Crop Science business. The uncertainty caused by ongoing Roundup litigation is also a major hangover on the stock. BAYRY had earlier slashed dividends to conserve cash as increasing Roundup litigation charges adversely impacted the bottom line.
The guidance for 2025 is pretty ordinary, as Bayer expects business to be challenging. The company also expects to pay out only the legally required minimum in 2025.
Nonetheless, sales growth was encouraging in the Pharmaceutical division. New products, Nubeqa and Kerendia, retained their impressive momentum and offset the negative impact of a decline in Xarelto sales. The company is working to expand the labels of its key drugs, Nubeqa and Kerendia, which should boost growth.
Successful development of additional drugs is imperative for Bayer amid multiple challenges. BAYRY expects to launch two new drugs — elinzanetant, a hormone-free treatment for menopause symptoms, and acoramidis, a drug for the treatment of a certain type of heart disease. The failure of a late-stage study on asundexian was a major setback for the company.
Bayer's Zacks Rank
BAYRY currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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