Bayer sticks to forecast but investors want more

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German chemicals and drugs giant Bayer stuck Thursday to its full-year targets after reporting a 40-percent jump in second-quarter profits that just narrowly beat market forecasts.

"We are pleased with the way our business performed," chief executive Marijn Dekkers said in a statement. "We confirm the full-year sales and earnings forecast that we raised in April."

Bayer -- based in Leverkusen,Germany -- said net profit in the April-June period rose by 40.9 percent to 747 million euros ($1.1 billion), beating expectations of 736 million euros according to analysts surveyed by Dow Jones Newswires.

Sales inched up 0.8 percent to 9.3 billion euros, or by 5.4 percent when adjusted for currency and other effects, somewhat below analyst forecasts of 9.5 billion euros.

After the report, Bayer shares were among the heavy losers on the Frankfurt stock exchange, showing a loss of 3.30 percent in afternoon trading, while the DAX index was 1.45 percent lower overall.

"Bayer's figures are not exceptional and the group was very cautious about its chemical activities" in particular, commented Stefan Muehlbauer, an analyst at Silvia Quandt.

Like rival BASF, Bayer gave a fairly sombre outlook for the second half of the year.

Bayer had said that its MaterialsScience division, which produces building materials and plastics, would help raise sales by almost 10 percent in the next six months.

But Bayer acknowledged that it "considers this objective to be increasingly ambitious."

The group's overall operating profit before special items rose 5.8 percent to 2.0 billion euros in the second quarter.

Sales at the HealthCare division fell by 2.3 percent to 4.2 billion euros but rose by 3.1 percent at its CropScience unit to 1.9 billion euros and by 3.5 percent at MaterialScience to 2.8 billion euros.

For all of 2011, Bayer said it still expect sales of between 36-37 billion euros, operating profit before special items of more than 7.5 billion euros and a 15-percent rise in earnings per share.

Dekkers said a plan to save 800 million euros per year that was unveiled in November was still on track.

Bayer expects to cut 4,500 positions worldwide by the end of 2012, including 1,700 in Germany.

© 2011 AFP

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