Bayer First-Quarter Net Profit Up 38% at EUR2.08 Billion -- Update

By Christopher Alessi Features Dow Jones Newswires

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FRANKFURT--German pharmaceuticals and chemicals giant Bayer AG (BAYN.XE) on Thursday reported a 38% jump in net profit for the first quarter, boosted by growth at its separated specialty plastics unit, while raising its outlook for the full year.

Net profit for the three months ended March was 2.08 billion euros ($2.27 billion), compared with EUR1.51 billion during the same period last year, beating analysts' forecasts. Analysts had predicted a net profit of EUR1.85 billion, according to a recent poll compiled by Factset.

Bayer said it now expects sales to increase to around EUR51 billion in 2017, up from a previous forecast of more than EUR49 billion. Earnings before interest, taxes, depreciation and amortization before special items should now rise by a low-teens percentage, up from an initial estimate of a mid-single-digit percentage increase.

The company attributed the raised guidance to sales and earnings growth at publicly-listed specialty plastics business Covestro. Bayer spun off the unit in late 2015 but still holds a 53% stake, as of March 2017.

Group sales climbed 12% to EUR13.24 billion, driven by Covestro and the pharmaceuticals division. Pharmaceutical sales were buoyed by the company's five blockbuster drugs including blood thinner Xarelto.

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Sales also rose at the crop science business, boosted by the North American market. Analysts at Germany's DZ Bank called the results at the agrochemical business a "positive surprise" following quarters of sluggish growth due to weak market conditions.

The crop science division has taken center stage at Bayer over the past year amid the company's planned $57 billion acquisition of U.S. seed maker Monsanto Co.

The deal, which Bayer expects to close by the end of this year, would create the world's No. 1 supplier by sales of both seeds and pesticides.

Write to Christopher Alessi at christopher.alessi@wsj.com

(END) Dow Jones Newswires

April 27, 2017 03:25 ET (07:25 GMT)