Investing.com -- Shares in Bayer (ETR:BAYGn) rose more than 5% on Tuesday after the German healthcare and agriculture group raised its full-year earnings and cash flow forecasts, following third-quarter sales and EBITDA that beat analyst expectations on strong growth in its pharmaceuticals division.
The German healthcare and agriculture group now expects 2026 EBITDA before special items of €9.8 billion to €10.3 billion on a currency-adjusted basis, compared with its previous forecast of €9.6 billion to €10.1 billion.
Third-quarter group sales rose 4.1% to €10.05 billion from €9.66 billion a year earlier, beating the €9.92 billion consensus compiled by Vara Research.
EBITDA before special items increased 6.9% to €1.62 billion from €1.51 billion, above analyst expectations of €1.43 billion.
The pharmaceuticals division drove the growth, with sales rising 8% to €4.68 billion and EBITDA before special items increasing 23.6% to €1.29 billion from €1.05 billion.
Net loss narrowed to €672 million from €963 million a year earlier, but was wider than the €242 million loss expected by analysts. The result included a €307 million impairment charge on the Xofigo brand in the pharmaceuticals division and €407 million in special charges.
Core earnings per share fell to a loss of €0.31 from earnings of €0.49 a year earlier, missing the €0.36 consensus, partly due to non-cash charges related to interest rate changes.
Free cash flow fell to a negative €293 million from positive €596 million a year earlier, partly reflecting expected higher payments to resolve legal proceedings.
Net financial debt declined to €31.08 billion from €32.71 billion a year earlier, largely due to a €3 billion payment from Apollo Global Management.
Chief Executive Bill Anderson said the pharmaceuticals division had reached a turning point in its growth trajectory.
Chief Financial Officer Judith Hartmann said the company's year-to-date performance gave it confidence to raise its full-year earnings, cash flow and debt targets.
Bayer also raised its 2026 free cash flow forecast to between negative €1.5 billion and negative €0.5 billion, from negative €2.5 billion to negative €1.5 billion previously.
It now expects year-end net financial debt of €28 billion to €29 billion, compared with its previous forecast of €29 billion to €30 billion.
The company raised its full-year EBITDA margin forecast for the pharmaceuticals division to 25% to 27% from 23% to 25%.
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