Bayer 3Q net profit falls to 277 million euros

FRANKFURT — Drug and chemical company Bayer AG said Wednesday that its third-quarter profit fell 76 percent on higher costs for energy and raw materials in what it termed a difficult market, but confirmed its guidance for the rest of 2008.

The maker of Aspirin, pesticides and One-A-Day vitamins earned 277 million euros ($351.8 million) in the July-September period, down 76 percent from last year's result of 1.2 billion euros.

Bayer blamed costs for energy, raw materials and currency effects for the decline, noting that cost it some 340 million euros ($431.8 million) in the quarter. A year earlier, Bayer's third-quarter profit was augmented by a one-time 911 million euro tax gain, the result of German tax reforms.

Third-quarter sales rose 2 percent to 7.9 billion euros ($10.03 billion) compared with 7.8 billion euros in the year ago period, lifted higher in part by rising demand or its key drugs, including the contraceptive Yasmin, and multiple sclerosis treatment Betaseron.

Leverkusen-based Bayer said it would still be able to meet this year's targets.

"Despite the difficult environment we expect in the fourth quarter, we are confirming our guidance for 2008 as a whole," CEO Werner Wenning said in a statement.

While sales were up in health care and crop science, business at material science held steady.

Sales at Bayer's health care division rose by 3.3 percent to 3.8 billion euros ($4.83 billion) from 3.7 billion euros a year ago with both pharmaceuticals and consumer care contributing to the improvement.

Cancer drug Nexavar sales rose 63 percent, while the multiple sclerosis treatment Betaferon gained 15 percent in sales. Oral contraceptive sales rose 5.1 percent, too.

Bayer's crop science unit, which makes pesticides and fungicides, saw its sales rise 8 percent to 1.2 billion euros ($1.83 billion) in the third quarter from 1.1 billion euros last year.

Bayer said especially good gains were recorded for seed treatment products, insecticides and fungicides, with the grouped region of Latin America, Africa and the Middle East showing 30 percent growth.

The material science segment's sales however showed a 3 percent decline in third quarter sales to 2.5 billion euros ($3.2 billion) from 2.6 billion euros a year ago. Bayer said the business in North America was impacted by Hurricane Ike.

Shares of Bayer were up 15 percent at 44 euros ($56) in Frankfurt trading.

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