Bayer's first-quarter adjusted profit falls less than expected

Logo of Bayer AG at a plant of the German pharmaceutical and chemical maker in Wuppertal

By Ludwig Burger

FRANKFURT (Reuters) -Bayer beat first-quarter analyst forecasts as it reported a slight drop in adjusted earnings on Tuesday, providing a respite for the CEO's turnaround efforts.

The group also lowered its full-year earnings outlook, citing negative currency effects, but retained its operating forecast.

The company's quarterly earnings before interest, taxes, depreciation and amortisation (EBITDA), adjusted for one-off items, slipped 1.3% to 4.41 billion euros ($4.76 billion), above an average analyst estimate of 4.15 billion euros posted on the company's website.

"The Pharmaceuticals Division saw gains in growth and profitability, and the Crop Science Division outperformed in a difficult market," Bayer said in a statement.

Shares in the group were up 2.3% shortly after the 0700 GMT open.

CEO Bill Anderson said in March he would suspend for up to three years any preparations to break apart the German maker of pharmaceuticals, crop protection products and consumer health remedies.

His focus is instead on changing Bayer's management structure as well as on cutting debt and dealing with U.S. lawsuits.

Anderson, who became CEO in June 2023, has had a tumultuous start with a continued wave of litigation about an alleged cancer-causing effect of weedkiller glyphosate and a major setback in drug development late last year.

Last month, he clearly won a confidence vote at his first annual general meeting at the helm of the embattled healthcare and agriculture group, defying a challenge from one German fund managing house.

The company said on Tuesday that based on end-of-March exchange rates, EBITDA before special items would likely come in between 10.2 billion and 10.8 billion euros in 2024, compared with a previous target range of between 10.4 billion and 11 billion euros.

That would be down from 11.7 billion in 2023.

Under Anderson's push to speed up business decisions and slash excess bureaucracy, Bayer cut the equivalent of 1,500 full-time jobs during the first quarter.

The company, which had close to 100,000 staff at the end of 2023, has not published any job reduction targets, saying only cutbacks would be significant.

"The most important measure of our impact will be much greater than a job number or a cost savings target. It will be in our ability to innovate, grow our businesses, and improve life for our customers," the CEO said in the statement.

($1 = 0.9273 euros)

(Reporting by Ludwig Burger; Editing by Rachel More, Sherry Jacob-Phillips and Jan Harvey)