February 28, 2012- Bayer AG, the pharmaceutical and chemical conglomerate, announced on Tuesday it was cutting its forecast for sales and said it was cautious about 2012. This announcement came even as Bayer made a profit during the fourth quarter of 2011.
The German based company reported a profit of $531.9 million compared to a loss of $193 million in the same quarter of 2010.
Nevertheless, the company fell short of analyst’s estimates of $551 million. A number of charges including the termination of projects for drug research and the end of the brand name Schering affected the results of 2011. Sales increased by 2%.
Bayer also manufacturers agricultural chemicals like herbicides, seed treatments and pesticides. It now expects sales to only grow by about 3%, which is down from last year’s estimate of 5%.
It expects somewhat of an improvement in earnings. Werner Baumann the company’s CFO said, “Overall the fourth quarter was mixed as far as business development.”
He pointed out that CropScience and HealthCare operations’ sales posted only modest gains and MaterialScience sales were flat. Analysts say the outlook for sales is not that bad although the company’s investors were hoping that the pharmaceutical division showed growth.
Bayer expects its earnings in the MaterialScience division to remain flat for 2012.