FRANKFURT (Reuters) - Quarterly earnings at Germany’s largest drugmaker Bayer surpassed expectations as strong sales of farming pesticides offset margin pressure at its engineering plastics unit.
First-quarter adjusted earnings before interest, tax, depreciation and amortization (EBITDA) for the group rose 9.4 percent to 2.44 billion euros ($3.22 billion), above the average estimate of 2.23 billion in a Reuters poll.
The shares were indicated about 3 percent higher in the pre-market trades, outperforming a flat benchmark index DAX.
The group reiterated on Thursday it expected a slight increase in adjusted EBITDA this year, with an increase of sales by about 3 percent when adjusted for currency swings and takeovers, but it added it was “increasingly confident for the rest of the year”.
Sales at Bayer’s CropScience unit, the world’s second-largest crop chemicals maker after Switzerland’s Syngenta, jumped 15.6 percent.
“The season got off to an early and promising start in the northern hemisphere,” Chief Executive Marijn Dekkers said in a statement.
The unit generates the bulk of its annual revenues in the first half of the year, when farmers in the northern hemisphere typically spray their fields.
“Very good start into 2012 especially of CropScience. We have to increase our earnings projections,” said DZ Bank analyst Peter Spengler.
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.
($1 = 0.7585 euros)
Reporting by Ludwig Burger