* Q2 loss/share ex-items $0.57; Wall St view profit $1.31
* Net sales $11 bln vs Wall St view $12.2 bln
* Cuts 2010 outlook to $3.25-$3.50/share from $5.30-$5.80
* Shares down 13 pct; biggest drop in 18 months
(Adds quotes, background; updates share price)
By Karl Plume
CHICAGO, July 29 Bunge Ltd (BG.N) posted a
surprising quarterly loss before a gain from the sale of its
fertilizer nutrients assets and the agricultural processor
slashed its full-year earnings outlook, sending its shares down
The company attributed the disappointing second-quarter
results primarily to low volumes and margins in agribusiness,
its largest business segment. It said it sees a more
challenging oilseed-crushing market than anticipated.
"The miss was broad-based across all segments, though
agribusiness, sugar and fertilizer were the clear
underperformers due to unfavorable hedges, weaker than expected
milling yields, and aggressive competition," Vincent Andrews,
an analyst with Morgan Stanley, said in a note to clients.
Bunge reported a net profit of $1.8 billion, or $11.15 per
share, up from $313 million, or $2.28 per share, a year
Excluding the $2.4 billion gain, Thomson Reuters I/B/E/S
said Bunge posted a loss of 57 cents per share, well below the
$1.31 profit analysts were expecting.
Revenue was flat at $10.97 billion, missing the analysts'
average forecast of $12.17 billion.
Bunge cut its full-year operating earnings forecast for a
second consecutive quarter to a range of $3.25 to $3.50 per
share from $5.30 to $5.80.
"The reduction in full-year net income is driven partly by
lower than expected earnings in the second quarter, which we
will not be able to recover," said Bunge CFO Jacqualyn Fouse.
Weak oilseed processing margins also prompted the move,
along with a weaker-than-anticipated second-half outlook, as
Bunge continues to restructure its Brazilian operations, she
Bunge, based in White Plains, New York, is among the
world's largest agricultural processors. It has become one of
the top sugar and ethanol producers in South America with
several recent acquisitions, but has significantly scaled back
its fertilizer business there.
Elevated oilseed prices in the second quarter due to tight
supplies and strong end-user demand squeezed Bunge's margins
from processing that crop in the United States and South
Profit at the agribusiness segment fell to $28 million,
from $435 million a year earlier.
Earnings in the sugar and bioenergy segment fell to $4
million from $13 million as mill expansion and construction
costs offset an improved sugarcane milling performance after
Bunge's acquisition of cane and ethanol producer Moema.
The fertilizer segment posted earnings of $2.37 billion,
compared with a year-earlier loss of $53 million. The latest
results included gains from the sale of Brazilian fertilizer
assets to mining giant Vale SA (VALE5.SA), but suffered from
slower fertilizer sales and tight margins.
Restructuring costs and other expenses led to a $13 million
loss in edible oils, compared with a year-earlier profit of $10
Earnings for the milling products segment, which includes
corn and wheat processing operations, fell to $1 million from
Bunge shares on the New York Stock Exchange were down 13
percent on Thursday afternoon at $46.77.
(Reporting by Karl Plume; editing by Gerald E. McCormick,
Lisa Von Ahn and Andre Grenon)