Reuters: Mergers News: UPDATE 2-Early corn planting sows seeds of Bayer profit rise

Reuters: Mergers News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

UPDATE 2-Early corn planting sows seeds of Bayer profit rise Apr 26th 2012, 11:02 Thu Apr 26, 2012 7:02am EDT * CropScience unit benefits from hot U.S. weather * MaterialScience profit dragged lower by feedstock costs * Q1 adj EBITDA 2.44 bln eur vs Rtrs poll avg 2.23 bln FRANKFURT, April 26 (Reuters) - Warm weather and an early start to the corn planting season in the United States helped Bayer sell more farming pesticides in the first quarter, boosting its earnings. Sales at Bayer's CropScience unit, the world's second-largest crop chemicals maker after Switzerland's Syngenta , jumped 15.6 percent in the three months through March, offsetting margin pressure at Bayer's plastics business. CropScience generates the bulk of its annual revenue in the first half of the year, when farmers in the northern hemisphere typically spray their fields. The hottest start to March since records were first kept in 1871 resulted in some U.S. Midwest farmers planting corn earlier than ever. First-quarter adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for Bayer, also Germany's largest drugmaker, rose 9.4 percent to 2.44 billion euros ($3.2 billion). That beat consensus of 2.23 billion in a Reuters poll. Group sales in the quarter topped 10 billion euros, of which CropScience contributed 2.6 billion. Bayer affirmed its group outlook and said it saw a slight rise in adjusted group EBITDA this year, with an increase of sales by about 3 percent when adjusted for currency swings and takeovers, but added it was "increasingly confident for the rest of the year". Rival Syngenta posted a smaller-than-expected 7 percent rise in quarterly sales as the impact of a drought in Latin America offset the benefits from bumper seed sales and an early start to the planting season. The MaterialScience unit, the world's largest maker of chemicals for insulation foams, and of plastics for car lights and panoramic roofs, saw adjusted core earnings slump almost 20 percent, struggling to pass along higher raw-material costs to customers. Like most plastics, Bayer's products are derived from petrochemicals. The price of crude oil in the first quarter was almost 10 percent above year-earlier levels. As the plastics division struggles with high raw materials costs, Bayer is also pinning its hopes on drug launches to lift earnings in the coming years. The company has said its four most promising drugs, led by new anti-clotting pill Xarelto, have the potential to rack up combined annual sales of 5 billion euros, although little of that will be seen this year. Sources also told Reuters on Wednesday that Bayer is nearing a multibillion-dollar acquisition to bolster its healthcare division. Shares in Bayer were up 0.9 percent at 54.20 euros by 1036 GMT. Germany's blue-chip DAX index was down 0.7 percent. Link this Share this Digg this Email Reprints

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