Bayer Warns on Crop Weakness as Roundup Plaintiffs Rise

By Sara Germano and Ruth Bender 

BERLIN -- Bayer AG warned that severe weather impacting its crop-science division could strain its ability to hit full-year sales targets, further highlighting troubles following the acquisition of Monsanto last year.

Meanwhile, the German chemical and pharmaceutical giant said the number of plaintiffs suing over its Roundup herbicide rose by another 5,000 over the last three months, highlighting the difficulty in putting to rest what so far has been a damaging legal battle over the world's most widely used weedkiller.

Bayer is grappling with the effects of what analysts say has been one of the worst crop planting seasons in the U.S. on record. The company reported a 49% drop in net income for the quarter ended in June, driven by the extreme weather across the U.S., Canada and Europe that hurt the crop-science division, Bayer's largest unit by sales.

The company said Tuesday challenges in its crop business makes achieving its full-year performance outlook "increasingly ambitious."

Overall sales grew 21% to EUR11.5 billion ($12.81 billion), boosted from its acquisition of Monsanto last June. Profit fell by nearly half to EUR404 million, as a wet planting season delayed farmers from getting their corn crop in the ground while dry weather across Europe and Canada has been hitting demand for herbicides and fungicides.

Bayer has been entangled in a protracted and potentially costly legal battle, pitching it against thousands of cancer patients claiming Monsanto-invented Roundup weedkillers cause cancer. The number of plaintiffs rose to 18,400 in the latest quarter, up from 13,400 in April, Bayer said.

The Leverkusen, Germany-based inventor of Aspirin has lost almost 40% of its market value since acquiring Monsanto on fears that the lawsuits will cost the company several billions of dollars and are clouding plans to boost profits by expanding in the agriculture sector.

So far Bayer lost the three first jury verdicts in the U.S. with awards reaching as high as $2 billion, though last week a California judge reduced that penalty to $86.7 million.

Bayer is appealing the verdicts and argues that Roundup and its active ingredient glyphosate are safe.

Write to Sara Germano at [e-mail] and Ruth Bender at [e-mail]

(END) Dow Jones Newswires

July 30, 2019 03:10 ET (07:10 GMT)

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