("UPDATE: Bunge 4Q Profit Surges On Strong Agribusiness
Results," published at 10:29 a.m. EST misstated the effect of a tax
rate on company earnings. A corrected version follows.)
(Updates with detail, analyst comment, recent share price.)
By Ian Berry and Tess Stynes
Bunge Ltd.'s (BG) fourth-quarter earnings surged as the
grain-processing company saw strong profit at its agribusiness
division, while the fertilizer unit swung to a modest profit.
The results beat analysts' expectations, as the company became
the latest grain merchandiser to show it is positioned to take
advantage of tightening global grain supplies.
While the tight grain supplies have a potential downside, as
Bunge likely will have to pay more for commodities that it resells
and processes, other grain buyers are forced to turn to Bunge and
other large competitors, which have a storage and transportation
network that allows them to source grain from around the world amid
supply disruptions.
"Our team managed volatile markets well and our global asset
network enabled us to be responsive to customers in the face of
supply disruptions," said Alberto Weisser, Bunge's chairman and
chief executive, in a press release.
Bunge reported a profit of $301 million, up $11 million from a
year earlier. On a per-share basis, which includes preferred
dividend impacts, earnings were $1.95 from a year-earlier loss of
21 cents. Excluding write-downs and prior-year gains from asset
sales, earnings were $1.99 a share from a loss of 55 cents. Revenue
jumped 22% to $12.73 billion.
Analysts polled by Thomson Reuters most recently forecast
earnings of $1.59 a share on revenue of $12.1 billion.
Bunge shares recently traded 44 cents, or 0.6%, higher at
$70.22. Shares of the White Plains, N.Y., company are up 21% from a
year ago.
Agribusiness, Bunge's largest segment, reported earnings nearly
sextupled on strong performance in the grain merchandising
business, while oilseed processing weakened.
The surge in earnings echoes recent results from competitors
such as Archer Daniels Midland Co. (ADM), which last week reported
a 29% jump in earnings, led by its agricultural services segment,
in which earnings tripled. Privately held Cargill Inc. also
reported sharply higher quarterly profit in January.
Bunge's earnings slipped in its sugar and bioenergy unit, driven
by lower sugarcane yields in Brazil that limited its ability to
produce ethanol and because of mill start-up costs. It also saw its
edible oils business earnings slide 61% absent prior-year gains
from asset sales.
Its fertilizer unit swung to a profit of $1 million from a loss
of $174 million a year earlier.
Jefferies & Co. noted that while Bunge beat expectations the
results were "solid but not spectacular."
-By Ian Berry, Dow Jones Newswires; 312-750-4072;
ian.berry@dowjones.com
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