Bayer AG
’s
BAYRY
third-quarter 2020 core earnings of 24 cents per American Depositary Receipt (“ADR”) decreased from 32 cents reported in the year-ago quarter and missed the Zacks Consensus Estimate of 27 cents.
Total sales in the quarter were $9.94 billion, down from $10.94 billion in the year-ago quarter. Sales also missed the Zacks Consensus Estimate of $10.63 billion.
Shares of the company have slumped 40.5% so far this year compared with the
industry
’s decline of 6.8%.
All growth rates mentioned below are on a year-over-year basis and after adjusting for currency and portfolio changes.
Quarter Highlights
The company started reporting under three segments — Pharmaceuticals, Consumer Health and Crop Science — from the fourth quarter of 2019. Please note that the company had announced divestment of its Animal Health business to Elanco in 2019 and reports the segment under discontinued operations.
In the reported quarter, Crop Science sales were €3.028billion, down11.6% from the year-ago quarter. Sales of Corn Seed & Traits fell by 39.9% with considerable declines in North America due to higher product returns and lower license revenues arising from lower-than-anticipated planted acreages for corn this year. Herbicide sales declined 12.7%. Business was primarily hurt in the North America region.
Revenues inthe Pharmaceuticals segment decreased 1.8% to €4.229billion in the third quarter. In China, the negative effects from the implementation of new tender procedures for the products,Glucobay and Avelox, were partly offset by strong volume increases for Glucobay and sales gains for other products.
Sales ofblood thinner drug, Xarelto, which the company co-developed with
J&J
JNJ
, increased 13.8%, mainly as a result of higher volumes in China, Germany and Russia. Sales of the ophthalmology drug, Eylea, increased 2.2%, driven by the launch of its prefilled syringes and strong demand in China. However, growth in Europe continued to be adversely impacted due to COVID-19. Sales of Aspirin Cardio, Bayer’s product for secondary prevention of heart attacks, rose 20.8%, mainly owingto a sharp increase in demand in China. The cancer drug,Stivarga, continued to deliver substantial sales gains, especially in the United States.
Consumer Health sales were up 6.2% year over year to €1.205billion in the third quarter and the division’s growth was well ahead of the industry market growth. Sales rose 21.4% in the Nutritionals category due to greater focus on health and prevention in connection with the COVID-19 pandemic as well as the launch of new products. Sales in the Digestive Health category rose 14.2%. Allergy & Cold category witnessed a decline in sales.
2020 Guidance
Bayer confirmed its currency-adjusted Group outlook for 2020.The company expects currency-adjusted growth in sales between €43 billion and €44 billion.
Core earnings per share are now expected between €6.70 and €6.90on a currency-adjusted basis.
Zacks Rank & A Stock to Consider
Bayer currently carries a Zacks Rank #4 (Sell).
Some other top-ranked stocks in the biotech sector are
Emergent BioSolutions Inc.
EBS
, and
ADC Therapeutics SA
ADCT
. While Emergent sports a Zacks Rank #1, ADC Therapeutics carries a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Emergent’s earnings estimates have increased from $5.31 to $6.61 for 2020 and from $6.06 to $8.42 for 2021 over the past 90 days. Shares of the company have increased 68.8% year to date.
ADC Therapeutics’ loss per share estimates have narrowed from $4.37 to $4.32 for 2020 and from $3.19 to $3.08 for 2021 in the past 60 days. Shares of the company have decreased 2.2% year to date.
Bayer Aktiengesellschaft Price, Consensus and EPS Surprise
Legal Marijuana: An Investor’s Dream
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027. Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
Download Marijuana Moneymakers FREE >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
