Bayer cut its full-year earnings outlook on Tuesday as weak agricultural markets drag down the chemical giant's other business divisions and pressure the company to deliver on an ambitious turnaround plan.
The Germany-based company posted a net loss of 4.18 billion euros in the third quarter, and cut its guidance on its crop science division due to slowing business in Latin America and pricing pressures from cheaper glyphosate generics. Those dynamics, along with regulatory pressure around two of Bayer's blockbuster herbicides, are likely to contribute to more earnings losses in 2025.
“Overall, we expect a muted outlook on top and bottom line next year with likely declining earnings," Chief Financial Officer Wolfgang Nickl said in a statement.
CEO Bill Anderson has slashed jobs and reorganized the company's operating model as part of a number of sweeping changes to get the business back on track. Bayer has held off on plans to break up its businesses for three years as the company works to shore up its finances.
Anderson urged investors to remain patient, saying he remains confident in the company's strategy and emphasizing stronger performance in the consumer health and pharmaceuticals businesses. In crop sciences, Bayer is focused on introducing new innovations while battling litigation challenges around its RoundUp herbicide that's cost the company billions of dollars.
Bayer also is facing regulatory pressure around dicamba after the weedkiller was pulled from the market by the U.S. Environmental Protection Agency earlier this year. The company is working to regain approval, but the uncertainty has created financial headwinds.
"Even as we see great progress in some areas, others require more attention," Anderson said in a third quarter earnings call on Tuesday. "That’s part of doing business. Sometimes you have to navigate twists and turns in the road, and adjust. It’s okay to do that, as long as you’re on the right path."
Weather and disease challenges in Latin America dragged down Bayer's profits in the third quarter. The company also reported lower sales of glyphosate, the main ingredient in Roundup, as it faces competition from cheaper generics.
Crop science sales in the third quarter decreased by 3.6% to a little under 4 billion euros, or around $4.2 billion. Earnings before interest, tax, depreciation and amortization (EBITDA), and adjusted for special items, declined 25.8%, with core earnings per share plummeting 36.8%.
