Bayer (BAYRY) - Get Report, the German drugs and chemicals maker stalking Monsanto (MON) , posted better-than-expected second-quarter earnings and increased its full-year earnings guidance on strong sales from its high-margin pharmaceuticals business.

Ebitda excluding exceptional items rose 5.7% over the quarter to €3.05 billion ($3.35 billion), beating analysts' consensus estimate of about €2.94 billion. The earnings beat came despite a slimmer 2.3% increase in revenue to €11.83 billion, about 2% below analyst predictions of €12.18 billion.

Bayer increased its 2016 earnings-per-share guidance to mid-to-high single-digit growth, up from mid-single digit. Revenue for the full year is likely to come in at between €46 billion and €47 billion, down from a previous forecast of over €47 billion after the company spun off its Covestro materials science business in an October 2015 IPO.

Bayer shares traded Wednesday morning at €94.46, up €0.89, or just under 1% on their Tuesday close.

The star of the quarter was Bayer's pharmaceuticals unit, where sales rose to €4.1 billion, up 5% on the same quarter last year. Revenue was boosted by new drug launches such as anticoagulant Xarelto, eye medicine Eylea, sales of which both came in more than 6% ahead of analyst forecasts.

Bayer CropScience was the biggest revenue miss of the quarter, posting sales of €2.52 billion, down 4.5% on the second quarter of 2015, and almost €200 million below analysts forecasts of €2.71 billion.

"Strong performance in pharma more than offset weaker than expected results in other divisions," noted Goldman Sachs. "The increased core EPS guidance compares to current consensus growth of 6%, implying about 1%-2% upside."

Bayer's results could be overshadowed by management comments on the ongoing efforts to buy seeds producer Monsanto. The St Louis-based target on July 19  rejected a sweetened $63.5 billion takeover bid describing it as "financially inadequate and insufficient to ensure deal certainty."

Bayer on July 14 offered $125 per share for Monsanto, up from $122 per share, and offered to pay a $1.5 billion breakup fee if it failed to get the deal past antitrust regulators. Monsanto shares closed Tuesday at $106.02 before falling almost 2% in the after- hours market to $104.

Monsanto said it remains open to discussions with Bayer, but is reported to be considering its own bid for the agricultural solutions division of Germany's BASF. (BASFY)

Bayer made no comment on its Monsanto bid in its quarterly report. Management is due to present the results to analyst on a conference call beginning at 8:00 am Eastern Standard Time.