German chemical and pharmaceutical company Bayer AG on Thursday lifted its outlook for 2010 as it reported a 63 percent increase in net profit that was bolstered by improved sales at its plastics unit to manufacturers, including car builders.
The company, famous for its Bayer aspirin but also a producer of pesticides, plastics and pharmaceuticals, reported a net profit of euro693 million ($918 million) in the January-March period compared with euro425 million a year earlier.
Revenue increased 5.3 percent to euro8.3 billion in the quarter compared with euro7.8 billion last year.
The company also raised its forecast for growth in 2010, saying it expects its core adjusted operating profit to exceed euro7 billion.
The quarterly results were helped by what the company called better-than-expected sales growth in its MaterialScience unit, which had pretax earnings of euro146 million in the quarter compared with a loss of euro263 million the year before.
The unit's revenues were up 35.5 percent to euro2.2 billion in the quarter, reflecting the demand from customers, including electrical components and automakers, with Asia and the Pacific region the chief driver of growth.
"Volumes also rose appreciably in the Europe and North America regions, which last year were the hardest hit by the economic crisis," the company said.
Those figures helped offset a 5.9 percent decline in revenues at Bayer CropScience, which makes herbicides and pesticides, to euro1.95 billion. That compared to euro2.1 billion a year earlier.
Sales at the unit were down in all regions, save for Asia and the Pacific and Latin America, the Middle East and Africa. European sales slid nearly 12 percent while North American sales, including the U.S., were down 8.5 percent.
Bayer cited "unfavorable weather conditions in a number of important growing regions" as well as "high product inventories in the distribution channels" for the decrease.
"Overall, business got off to a weak start but picked up again significantly toward the end of the quarter," it added.
Bayer's HealthCare unit reported revenues of euro3.86 billion, up .7 percent from euro3.84 billion in 2009.
Sales in its pharmaceuticals unit, which includes the cancer drug Nexavar, birth control pill Yasmin and multiple sclerosis treatments Betaferon and Betaseron, were down 2.2 percent to euro2.5 billion.
Bayer shares were down less than half a percent to euro49.94 in Frankfurt morning trading.
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