Bayer Beats on Q2 Earnings and Sales, Raises '25 Adjusted Sales View

Bayer AG (BAYRY) reported second-quarter 2025 core earnings of 35 cents per American Depositary Receipt (ADR), which comfortably beat the Zacks Consensus Estimate of 25 cents per ADR. The company reported earnings of 25 cents per ADR in the year-ago quarter.

Core earnings of €1.23 per share surged 30.9% year over year due to lower interest expense and lesser tax outlay.

Total sales in the reported quarter were $12.18 billion (€10.7 billion), down 3.6% on a reported basis as volume growth of 0.7% and positive pricing impact of 0.2% were offset by a 4.9% negative impact of currency. Sales beat the Zacks Consensus Estimate of $12 billion.

On a currency and portfolio-adjusted basis, sales inched up 0.9% year over year.

Year to date, shares of Bayer have surged 63.1% against the industry’s decline of 3.7%.

All growth rates mentioned below are on a year-over-year basis after adjusting for currency and portfolio changes.

BAYRY’s Q2 Results in Detail

Bayer reports under three segments, namely Crop Science, Pharmaceuticals and Consumer Health.

In the reported quarter, Crop Science sales increased 2.2% to €4.8 billion, driven by growth in Corn Seed & Traits.

Within this segment, Corn Seed & Traits sales surged 29.5%, driven by increases in North America, Latin America and Asia/Pacific due to higher planted area as well as price increases. In the Herbicides business, sales were up 1.4% as sales of non-glyphosate-based products were up due to higher volumes in Latin America and Europe/Middle East/Africa. Meanwhile, sales of glyphosate-based products came in at the prior-year level, with an increase in volumes offsetting a decline in prices.

Fungicide sales were down 5.7%, largely due to continued generic pricing pressure across all regions and lower volumes in North America. Soybean Seed & Traits decreased 18.1% due to regulatory impacts of the dicamba label vacatur in the United States. The Insecticides business decreased 13.1%, mainly due to the expiration of the Movento registration in Europe.

Sales at Cotton Seed were down 25.5% due to regulatory impacts in the United States. The Vegetable Seeds business was up 1.1%, largely driven by higher prices.

BAYRY’s revenues in the Pharmaceuticals segment increased 0.6% to €4.47 billion. Nubeqa (for cancer) sales surged 50.5% to €546 million, recording gains in all regions and witnessing significant improvements in volumes, especially in the United States and the EU. Kerendia sales surged 67.1%, mainly due to a substantial rise in volumes in the United States and China.

Sales of the ophthalmology drug, Eylea, increased 4.3% to €862 million, driven by higher volumes, particularly in France. The launch of Eylea 8 mg, offering longer treatment intervals, boosted sales.

However, sales of oral anticoagulant Xarelto, co-developed with Johnson & Johnson (JNJ), decreased 27.1% to €650 million due to competitive pressure from generics, especially in the EU and Japan.

In the U.S. market, Xarelto is marketed by J&J. Bayer earns license revenues from JNJ for Xarelto sales in the United States.

Please note that Bayer’s HealthCare unit co-develops Eylea with Regeneron (REGN), which records net product sales of Eylea in the United States. BAYRY records net product sales of Eylea outside the country. REGN records its share of profits/losses in connection with the sales of Eylea outside the United States.

Sales of the Mirena product family (long-term contraceptive) gained 4.1%, largely driven by growth in the United States.

Consumer Health sales rose only 0.2% to €1.4 billion due to a challenging environment in key markets in North America, where business was again impacted by a soft allergy season, and in Asia/Pacific.

Within this segment, Nutritionals sales declined 7%. The Allergy & Cold business gained 5.7% from gains for Claritin and the Aspirin product family. Dermatology sales (+4.4%) gained from continued strong demand for Priorin and Bepanthen.

Pain & Cardio sales were up +1.4% but Digestive Health business was down 3.8%.

BAYRY Updates 2025 Guidance

On a currency-adjusted basis, Bayer now expects to generate sales in the range of €46-€48 billion in 2025 (previously guided range: €45- €47 billion).

The rise in revenue guidance was due to the better-than-expected business performance at Pharmaceuticals in the first half of the year.

The company expects EBITDA before special items to be in the band of €9.7-€10.2 billion in 2025, up from the previous projection of €9.5-€10 billion.

BAYRY’s Key Pipeline Updates

In May, Eylea was approved in China for the treatment of neovascular (wet) age-related macular degeneration (nAMD).

In July, the European Commission granted approval to Nubeqa, an oral androgen receptor inhibitor, in combination with androgen deprivation therapy for patients with metastatic hormone-sensitive prostate cancer.

Last month, the FDA approved label expansion of Kerendia for the treatment of adult patients with heart failure and a left ventricular ejection fraction (LVEF) of ≥40%. Applications seeking approval of Kerendia in the same indication were also submitted in China, the EU and Japan.

Elinzanetant had been approved in the United Kingdom and Canada for the treatment of moderate to severe menopause-related vasomotor symptoms (VMS, also known as hot flashes) under the brand name Lynkuet. Applications seeking approval in the United States, the EU and other markets are currently being reviewed.

However, the FDA recently notified the company that it has extended the review period for the new drug application (NDA) for elinzanetant for the treatment of moderate to severe vasomotor symptoms due to menopause. The FDA has determined that additional time is needed for a full review of the NDA submission, including information provided to support the application.

Bayer has submitted applications seeking approval of the investigational contrast agent gadoquatrane in the United States and Japan in June, and in the EU in July. Gadoquatrane is being developed for use in contrast-enhanced magnetic resonance imaging (MRI) of the central nervous system and other body regions in adults and pediatric patients, including newborn babies.

Our Take on BAYRY’s Performance

Bayer reported better-than-expected second-quarter results. Label expansion of key drugs and approval of additional drugs should further boost sales from the pharbusiness and offset Xarelto sales declines.

The Crop Science business also posted an increase after being under pressure over the past few quarters due to lower glyphosate-based product and insecticide sales.

The successful development of new drugs is imperative for Bayer. Increased litigation charges arising from the lawsuits claiming that its Roundup weedkiller causes cancer have significantly impacted the bottom line.

Bayer’s Zacks Rank

BAYRY currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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