THE WALL STREET JOURNAL. ** Thursday, October 31, 2019 |B3
an advertising push by lawyers
seeking to recruit more plain-
tiffs before any settlement is
reached.
Besides engaging “construc-
tively” in settlement talks,
Bayer has continued to defend
itself in appeals and would do
so in any new trial, Mr. Bau-
mann told reporters Wednes-
day.
Bayer has argued that
Roundup and its active ingre-
dient glyphosate are safe and
that this view is backed by
hundreds of regulatory deci-
sions around the world.
While some investors worry
that the growing number of
plaintiffs could boost the final
bill for Bayer, they also hold
out the hope that a settlement
will be reached—a prospect
that has helped the stock re-
cover slightly since the start of
this year. Several trials sched-
uled to take place this summer
and fall have been delayed,
suggesting that settlement
talks are moving forward.would only agree to a “finan-
cially reasonable” settlement.
He slightly changed tone on his
view that any settlement
should reach “finality,” saying
it must come as close as possi-
ble to that goal.
Mr. Baumann declined to
comment on the current state
of the talks. According to a
person familiar with the medi-
ation discussions, Bayer and
plaintiff lawyers are still far
apart on the amount and scope
of a potential settlement.
The spike in plaintiffs has
made a resolution even more
challenging, as Bayer faces
more plaintiff lawyers, said
Thomas Claps, a litigation ana-
lyst for Susquehanna Financial
Group.
Meanwhile, Bayer’s business
is improving. Sales in its crop-
science unit recovered from
weakness in the second quar-
ter, growing 5.8% from a year
earlier to €3.95 billion ($4.4
billion) on strength in Latin
America and North America.Overall sales rose to €9.8 bil-
lion, slightly beating analysts’
expectations, according to esti-
mates from FactSet. The num-
ber excludes the company’s an-
imal-health business, which it
is selling to Elanco Animal
Health Inc.
Sales in the pharmaceuticals
unit, which counts for a little
more than half of group sales,
rose 8.2% to €4.5 billion,
driven mostly by its two block-
buster drugs, blood thinner
Xarelto and eye treatment Ey-
lea.
Net income dropped 65% to
€1 billion, due mostly to a
large divestment gain recorded
in the comparable period last
year.
Bayer confirmed its full-
year outlook of a 4% rise in
sales. In July, the company
warned that severe weather af-
fecting its crop-science divi-
sion could put its sales target
out of reach.
—Sara Randazzo
contributed to this article.Cold coffee is warming up
Starbucks Corp.’s U.S. sales.
The world’s largest coffee
chain said Wednesday that
stronger U.S. sales of iced cof-
fee and other cold drinks bol-
stered sales in its latest quar-
ter. Global comparable-store
sales rose 5% in Starbucks’s
fiscal fourth quarter, a per-
centage point more than ana-
lysts expected.
Chief Executive Kevin John-
son said the results reflected
strong sales of cold coffee and
teas that now account for
about half of the company’s
beverage sales. Younger cus-
tomers in particular are buy-
ing those drinks throughout
the day, he said.
“We are being very focused
on the things that we know
matter the most,” Mr. Johnson
said in an interview.
Shares climbed in after-
hours trading.
Comparable sales rose 6%
in the U.S., where Starbucks
has promoted its nitro cold-
brew coffee as sales of its
older Frappuccino beverages
have slowed. The company has
brought nitro taps to all of its
8,700 company-owned U.S.
stores, more than one-quarter
of its total.
Starbucks recorded robust
cold-coffee sales during the
summer, a more natural time
to drink iced beverages than
the fall.
For the fourth quarter, the
company said revenue rose 7%
from a year earlier to $6.7 bil-
lion. Starbucks reported a
quarterly profit of $802.9 mil-
lion, up from $755.8 million
last year.
The company said it ex-
pects to earn an adjusted
profit of $3 to $3.05 a share
for its 2020 fiscal year. Star-
bucks also projected a 3%-
to-4% gain in global compara-
ble sales for that year.
BYHEATHERHADDON
Starbucks
Gets Lift
From Its
Cold Brews
BUSINESS NEWS
BERLIN— Bayer AG said the
number of plaintiffs claiming
its Roundup herbicides caused
cancer more than doubled to
42,700 in the past three
months, adding pressure on
the company to resolve the le-
gal battle that has raised ques-
tions about its future.
The chemicals-to-pharma-
ceuticals company was thrown
into one of the worst crises in
its 156-year-old history after
its $63 billion acquisition of
Roundup inventor Monsanto
Co. last year opened it up to
thousands of lawsuits about
the herbicides.
Since August 2018, three ju-
ries have found the products
caused non-Hodgkin lym-
phoma, chopping roughly 30%
off Bayer’s market value.
On Wednesday, the stock
rose 2% after the company
posted better-than-expected
sales and profit for the third
quarter.
“Bayer is on track, both op-
erationally and strategically,”
Chief Executive Werner Bau-
mann said.
Mr. Baumann, who has
faced heavy criticism from
shareholders, highlighted prog-
ress the company has made in
selling assets, improving prof-
itability and strengthening
oversight of its legal strategy.
The increase in Roundup
plaintiffs, from 18,400 in early
July, comes as their lawyers
and Bayer discuss a potential
settlement. Some investors, in-
cluding activist hedge fund El-
liott Management Corp., have
urged Bayer to consider set-
tling.
Bayer had warned about a
sharp rise in plaintiffs earlier
in October, but played down
the significance, saying the
numbers said nothing about
the size of any settlement pay-
ment or the merits of the
claims. It blamed the rise onBYRUTHBENDERClaims on Bayer Herbicide Double
Seller of Roundup
blames surge on an
advertising push by
plaintiff lawyersThe company has argued the herbicide and its active ingredient glyphosateare safe and that this view is backed by regulatory decisions.JEAN-FRANCOIS MONIER/AGENCE FRANCE-PRESSE/GETTY IMAGES“We continue to think that a
settlement is the most likely
and beneficial outcome for in-
vestors,” Bernstein Research
said in a client note. Baader
Bank’s Markus Mayer said a
settlement below $20 billion
would be a positive share-price
trigger.
Settling Bayer’s legal liabili-ties is complicated, especially
as Roundup continues to be
sold in stores, making it hard
for the company to achieve an
agreement that would prevent
future plaintiffs from coming
forward.
Mr. Baumann repeated
Wednesday that the company42,700
Plaintiffs claiming that
Roundup caused cancer© 2019 Dow Jones & Company, Inc. All rights reserved. 6DJ7288DiscoverWSJPuzzles,America’smost
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