By Christopher Alessi 

LEVERKUSEN, Germany-- Bayer AG said fourth-quarter net profit fell 26% from a year earlier, squeezed by one-off expenses for impairments and litigation, though the German pharmaceutical and chemicals conglomerate set out ambitious targets for this year.

Bayer, which last year announced a planned $57 billion takeover of U.S. seed maker Monsanto Co., said it expects sales to increase to more than EUR49 billion ($51.45 billion) this year, compared with EUR46.77 billion in 2016.

Net profit fell to EUR453 million in the three months to end-December from EUR613 million in the same period a year earlier. Analysts had predicted quarterly net profit of EUR712 million, according to a recent poll conducted by The Wall Street Journal.

The German company booked impairment charges of EUR170 million in connection with its implantable contraceptive product Essure, which has faced lawsuits and scrutiny by the U.S. Food and Drug Administration over safety concerns. The company also took impairment charges of EUR160 million related to the integration of acquired over-the-counter drug businesses.

The company also expects earnings before interest, taxes, depreciation and amortization before special items to grow by a mid-single-digit percentage this year, up from EUR11.3 billion in 2016, helped by returns from expected strong sales of the group's major blockbuster drugs like blood thinner Xarelto.

Quarterly sales rose 4.7% to EUR11.82 billion, while the company's closely watched Ebitda before special items climbed by 14% to EUR2.18 billion, driven by growth at the pharmaceuticals division and Covestro, the company's recently-separated specialty plastics division.

Bayer, which spun off Covestro in late 2015, currently holds a 64% stake.

Earnings at the consumer health business--which has expanded significantly since Bayer acquired U.S.-based Merck & Co.'s over-the-counter drug unit for $14.2 billion in 2014--were held back in part by unfavorable exchange rates.

The crop science division continued to be weighed down by weak market conditions in the agriculture industry. Quarterly sales stayed flat year-over-year, at EUR2.4 billion.

That business has taken center stage since Bayer last year agreed to acquire Monsanto. The deal, which the company expects to close by the end of the year, means the crop science unit would comprise roughly half of group sales, up from 30%. The tie-up would also create the world's No. 1 supplier by sales of both seeds and pesticides.

Write to Christopher Alessi at christopher.alessi@wsj.com

(END) Dow Jones Newswires

February 22, 2017 04:02 ET (09:02 GMT)