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Bayer 4th-quarter profit narrows, but full-year earnings up

Bayer 4th-quarter profit narrows, but full-year earnings up

Drug maker Bayer AG said Thursday that its profit narrowed in the final three months of 2007 even as sales rose, but pointed to one-time gains a year earlier as the reason for the decline.
The slip in profit was the first quarterly decline in more than a year for the company, whose products include the painkiller Aleve, One-A-Day vitamins and flea and tick medicine for animals, Advantage.
The Leverkusen-based company, famed for inventing aspirin, earned euro67 million (US$100.8 million) in the fourth quarter of 2007, down from euro311 million profit a year earlier _ and well below the euro211 million (US$317.4 million) that analysts polled by Dow Jones Newswires had predicted.
Bayer noted that the previous year's fourth-quarter earnings included a euro236 million gain from the sale of its stake in GE Bayer Silicones and another euro203 million it received in tax-related income.
However, sales rose slightly in the fourth quarter of 2007, climbing to euro1.4 billion (US$2.1 billion) from euro1.3 billion.
Pretax profit in the quarter, a key indicator of the company's future health, rose to euro385 million (US$579.19 million) from euro206 million _ an 87 percent increase.
The earnings report pushed Bayer shares down 2.8 percent to euro52.55 (US$79.06) in Frankfurt trading.
For the whole of 2007, Bayer's net profit nearly tripled _ fueled by increased sales of pharmaceuticals, which include the contraceptive Yasmin and multiple sclerosis treatment Betaseron, acquired with Schering AG in 2006.
Bayer earned euro4.7 billion (US$7 billion) in 2007, compared with euro1.7 billion in 2006. That was still slightly below the euro4.8 billion (US$7.2 billion) that analysts had predicted.
Pretax profit rose to nearly euro3.2 billion (US$4.8 billion) from euro2.7 billion, a 14.2 percent rise, while sales rose to euro32.4 billion (US$48.7 billion) from euro28.9 billion.
Bayer HealthCare's annual sales rose 26 percent to euro14.8 billion (US$22.3 billion) from euro11.7 billion. MaterialScience's sales were up 2.7 percent to euro10.4 billion (US$15.6 billion) from euro10.2 billion in 2006, and the CropScience unit sales were up 2.2 percent to euro5.8 billion (US$8.7 billion) from euro5.7 billion.
Chief executive Werner Wenning called the year a successful for the company "from both an operational and a strategic perspective."
The company forecast that overall sales this year would increase by 5 percent, with improved sales at the HealthCare and CropScience units. Wenning said Bayer's MaterialScience unit, which makes plastics and other products, anticipated a "more difficult market environment" because of the high cost of oil.
However, he said that "ee still plan to achieve an underlying (pretax) margin of over 22 percent for the group in 2009."
Wenning said that Bayer expects to take special charges of some euro650 million (US$977.8 million) this year related to the integration of Schering.
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Updated : 2021-07-30 16:06 GMT+08:00