* Says still sees FY adj EBITDA decline limited to 5 percent
* Plastics and foams business recovers further
* Cuts FY margin guidance for crop chemicals unit
* Group Q3 adj EBITDA 1.50 bln eur vs poll avg 1.47 bln
* Shares up 0.3 percent after initial drop
By Ludwig Burger (Rewrites throughout, adds details, analyst quote)
FRANKFURT, Oct 27 (Reuters) - Germany's largest drugmaker Bayer reaffirmed its full-year outlook and posted forecast-beating operating earnings, helped by a continued recovery at its plastics division.
But Bayer's CropScience unit, jostling with Syngenta for the No.1 spot in the global market for pesticides, was hit by falling prices for wheat and corn as well as bad weather, tarnishing the picture.
The drugs-to-chemicals hybrid stuck to its target of limiting the slide in core underlying profit to 5 percent in 2009, saying the global economy seems to have seen the worst.
At the same time on Tuesday, it lowered the outlook for its crop chemicals unit, saying earnings before interest, taxes, depreciation and amortisation (EBITDA), excluding special items, would be 23-24 percent of sales this year, down from a previous margin target of 25 percent.
Bayer shares were up 0.5 percent at 48.08 euros by 0900 GMT, recovering from a decline of 1.5 percent after the market open. Germany's benchmark gauge DAX was up 0.2 percent.
A 48 percent decline in third-quarter core underlying earnings at CropScience also disappointed the market, even though the second half of the year traditionally accounts for only about a quarter of the unit's annual operating earnings.
Farmers on the northern hemisphere, its largest customer group, typically apply crop chemicals in the first half.
"CropScience was disappointing, that's where earnings have declined markedly," LBBW analyst Karl-Heinz Scheunemann commented. "Overall group results were not half bad."
Syngenta last week reported a worse-than-expected slide in third-quarter sales but the stock market cheered a brighter outlook on 2010.
Drugs-to-chemicals hybrid Merck KGaA on Monday gave an outlook which fell short of expectations.
ASIA-PACIFIC VOLUMES
Bayer confirmed its group outlook after reporting third-quarter group operating earnings that were slightly above market expectations, helped by a rebound at its plastics and foam chemicals unit.
"Volumes already increased again in the Asia-Pacific region," Chief Executive Werner Wenning said.
Third-quarter core underlying profit, stagnated at 1.50 billion euros ($2.26 billion), slightly ahead of the average estimate of 1.47 billion euros in a Reuters poll of 15 analysts.
Bayer also stuck to its previous outlook for full-year sales of between 31-32 billion euros, down from 32.4 billion in 2008.
It had said earlier this month that orders at its MaterialScience unit were improving..
BASF, which competes with Bayer in the market for padding and insulation foam chemicals, came out with better-than-expected third-quarter operating results on Oct. 14, two weeks ahead of the scheduled date.
Bayer shares are valued at about 12.5 times earnings for the coming 12 months, according to StarMine, which weights estimates according to analysts' track record.
Shares of the German chemical-drugs hybrid have gained 16 percent over the last three months, outperforming both the DJ Stoxx healthcare index and the chemicals benchmark, amid a brighter outlook for its plastics and foam chemicals business. (Editing by David Cowell)