October 23, 2009
Bunge posts lower Q3 earning, cuts outlook
Bunge Ltd. reported a slight decline in third-quarter earnings and cut its full-year forecast on Thursday (Oct 22) amid a weak market for its fertiliser, sending its shares down nearly 6 percent.
Net profit fell to US$232 million, or US$1.62 per share, from US$234 million, or US$1.70 a share, a year earlier.
Analysts on average had expected earnings of US$1.47 per share, according to Thomson Reuters, while revenue dropped 24 percent to US$11.3 billion, compared with analysts'' estimates of US$12.02 billion.
New York-based Bunge said strong agribusiness results were driven by good margins, but it reported a loss in fertiliser due to high inventory costs and low market prices.
The company cut its full-year earnings forecast to a range of US$3.10 to US$3.50 per share due to a weaker-than-anticipated near-term fertiliser outlook. It previously had expected US$4.90 to US$5.40.
Bunge chief financial officer Jacqualyn Fouse said fertiliser results will be weaker than previously expected due to a softer pricing environment both internationally and in Brazil.
Bunge, the largest producer and supplier of fertiliser in South America, said sales volumes of the products had increased seasonally in the third quarter, but were not as strong as expected.
Fertiliser sales in Brazil have been subdued by farmers'' credit constraints. Also, farmers there are cutting back seedings of nutrient-intensive corn and cotton in favour of soy, which do not require as much fertiliser.
Bunge said tight soy supplies in drought-hit Argentina and strong demand for soy from China aided its US and Brazilian grain origination businesses.