Germany’s Bayer posts slight decline in 2nd-quarter net profit to $682 million

Bayer’s 2nd-quarter profit down 1.3 percent

BERLIN — Germany’s Bayer AG saw second-quarter net earnings slip by 1.3 percent as a stronger revenue was offset by one-time charges for lawsuits and writing down a cancer drug.

The maker of pharmaceuticals, specialized plastics and farm products earned euro525 million ($682 million) in the April-June period, down from euro532 million a year earlier.

Revenues rose 14.6 percent to euro9.18 billion from euro8 billion, led by growth in the consumer health and high-tech materials divisions. Bayer’s products range from drugs including aspirin to pesticides, plastics and pharmaceuticals.

Bayer, whose consumer brands include Aleve, Alka-Seltzer and One-A-Day vitamins, said it took special charges of euro255 million in the quarter, of which euro123 million for litigation at the health care and crop science divisions and the rest from a partial write-down on the cancer drug Zevalin.

Bayer’s MaterialScience division, which produces high-tech materials such as polycarbonates and polyurethanes, posted the strongest rise in quarterly revenue — a 46.9 percent increase to euro2.69 billion.

The segment “has left the crisis behind and saw business expand more strongly than expected,” chief executive Werner Wenning said in a statement. “Volumes have returned to the pre-crisis level.”

The company’s health care division saw a 6.4 increase in revenues to euro4.3 billion. The hemophilia drug Kogenate, antibiotic Avalox and cancer treatment Nexavar all saw strong growth rates, Bayer said.

However, sales of Yaz oral contraceptives were hit by lower demand in the U.S., where there was increasing competition from generic drugs; and sales of multiple sclerosis drug Betaferon were lower because of greater competition in Germany and the U.S.

Bayer’s crop science division saw revenue increase by a modest 1.7 percent to euro1.88 billion. Sales of crop protection products were hit by bad weather in Europe, and by pressure on prices from generic manufacturers in the U.S., Bayer said.

The company confirmed the full-year outlook it issued in April. “We remain optimistic for 2010,” CEO Wenning said.

Bayer now plans to spend more this year on research and development than previously planned, he added. It expects spending of euro3.1 billion, up from the euro2.9 billion projected so far.

Its pretax earnings before special items were up 8.6 percent, rising to euro1.92 billion from euro1.77 billion.

First-half net profit was up 27.3 percent at euro1.22 billion from last year’s euro957 million, Bayer said. Revenue grew by 10 percent, climbing to euro17.5 billion from euro15.9 billion.

Bayer shares were up 0.8 percent in Frankfurt trading at euro44.55.