Yahoo Finance Bayer's (BAYRY) Q4 Earnings and Revenues Top, Outlook Weak
Bayer AG BAYRY reported fourth-quarter 2022 core earnings of 34 cents per American Depositary Receipt (“ADR”), which beat the Zacks Consensus Estimate of 32 cents and our estimate of 28 cents. The company reported earnings of 36 cents per ADR in the year-ago quarter.
Total sales in the fourth quarter were $12.25 billion, beating the Zacks Consensus Estimate of $11.5 billion and our estimate of $11.5 billion.
Shares of Bayer have rallied 7.6% in the year so far compared with the industry’s growth of 9.1%.
Image Source: Zacks Investment Research
All growth rates mentioned below are on a year-over-year basis after adjusting for currency and portfolio changes.
Quarter in Detail
Since the fourth quarter of 2019, Bayer started reporting under three segments, namely Crop Science, Pharmaceuticals and Consumer Health.
In the fourth quarter of 2022, Crop Science sales were €5.6 billion, up 11.4% from the year-ago quarter, with growth in all regions. Herbicide sales jumped 16.8% due to higher volumes and prices, especially for glyphosate-based products. Sales of Corn Seed & Traits were up 23.6% year over year as sales in North America surged, driven by an increase in prices and volumes. Sales of Fungicides were down 6.1% % as business declined in Latin America, owing to lower volume in Brazil and drought in Argentina. Sales of Soybean Seed & Traits surged 22.6% year over year.
Revenues in the Pharmaceuticals segment were down 2.8% year over year to €4.85 billion in the reported quarter, as declining sales of Adempas offset gains for ophthalmology drug Eylea and oncology sales of Nubeqa and Kerendia. Please note that Bayer’s HealthCare unit co-develops Eylea with Regeneron REGN. Eylea sales increased 7.7%, driven by strong growth as a result of high demand in all regions.
Regeneron records net product sales of Eylea in the United States. Bayer records net product sales of Eylea outside the United States. REGN records its share of profits/losses in connection with sales of Eylea outside the United States.
However, sales of the oral anticoagulant, Xarelto, which Bayer co-develops with J&J JNJ, decreased, largely due to tender procedures in China, price pressure in the United Kingdom and the expiration of the patent in Brazil.
J&J is facing patent challenges in the United States for Xarelto and some of its other drugs. JNJ is also working on Xarelto’s label expansion.
Consumer Health sales increased 5.8% year over year to €1.52 billion in the fourth quarter, owing to strong growth across all regions. The business benefited from the launch of innovative products. The company recorded strong sales from allergy products owing to the launch of Astepro antihistamine nasal spray in North America. Sales in the Dermatology category increased by 8.4%, with double-digit percentage gains in North and Latin America.
2022 Results
Revenues in 2022 came in at $53.3 billion, missing the Zacks Consensus Estimate of $53.6 billion. Earnings per share came in at $2.08, which beat the Zacks Consensus Estimate by a penny.
Bayer Aktiengesellschaft Price, Consensus and EPS Surprise
Bayer Aktiengesellschaft price-consensus-eps-surprise-chart | Bayer Aktiengesellschaft Quote
2023 Guidance
For 2023, the company expects to generate currency-adjusted sales of €51 billion to €52 billion, an increase of 2% to 3% on a currency- and portfolio-adjusted basis. Core earnings per share are projected at around €7.20 to €7.40 on a currency-adjusted basis.
Our Take
The outlook for 2023 was disappointing, as business will be impacted by inflation and price factors. The company anticipates lower prices for agricultural herbicides as well as for some of its established pharmaceutical products.
Zacks Rank & Another Stock to Consider
Bayer currently carries a Zacks Rank #3 (Hold). A stock worth considering in the large-cap pharma sector is Novartis NVS, which carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings estimates for Novartis for 2023 are up by 9 cents in the last thirty days. Novartis surpassed estimates in all of the trailing four quarters, with the average surprise being 2.92%.
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
Regeneron Pharmaceuticals, Inc. (REGN) : Free Stock Analysis Report
Novartis AG (NVS) : Free Stock Analysis Report
Johnson & Johnson (JNJ) : Free Stock Analysis Report
Bayer Aktiengesellschaft (BAYRY) : Free Stock Analysis Report
