Bayer earnings hit by lawsuit provisions

AP News
Posted: Jul 31, 2012 3:37 AM
Bayer earnings hit by lawsuit provisions

BERLIN (AP) — Drug and chemical company Bayer AG says its second-quarter earnings were a third lower than last year because of one-time charges that included money set aside to deal with lawsuits linked to a contraceptive.

Revenues rose 10 percent however and the company raised its full-year outlook.

Bayer on Tuesday reported net earnings of €494 million ($606 million) for April-June — down 34 percent from €747 million a year earlier. Revenues climbed to €10.18 billion from €9.25 billion.

Earnings were weighed down by one-time deductions from earnings totaling €762 million. That included €496 million in money set aside for settlement costs from lawsuits over birth control pills marketed as Yasmin and YAZ. Bayer faces lawsuits in the United States from women claiming the contraceptive caused blood clots that led to serious health consequences.

Otherwise the picture was brighter. Bayer said it was raising its predictions for full-year revenue and pre-tax earnings. Pharmaceutical sales rose 4.3 percent, helped by growth in the United States and China, while Western Europe declined.

Sales boomed 17 percent in the company's farm chemical business, continuing strong sales from the first quarter. The company said business was helped by high prices for agricultural products.

The company's materials division also saw stronger sales to companies as Bayer benefited from higher prices in North America and Europe which offset declines in Asia. The division makes foam and plastic for a wide range of uses including autos, construction and sporting goods.