July 30, 2010

Bunge cuts profit forecast on soy margin shrink

Bunge Ltd. reduced its full-year earnings forecast after soy processing margins in the US and South America shrank; the shares dropped the most in more than a year.

Profit excluding some one-time items will be US$3.25 to US$3.50 a share this year, the White Plains, New York-based company said. It had previously forecast earnings of US$5.30 to US$5.80, and analysts had projected US$5.25, according to reports.

Bunge CEO Alberto Weisser said it had expected a more balanced supply and demand for soy in the quarter. Lower-than-anticipated soy supply hurt processing margins.

Net income rose more than fivefold to US$1.78 billion, or US$11.15 a share, from US$313 million, or US$2.28, a year earlier. The company closed the sale of its Brazilian fertiliser business to Vale SA in May, resulting in a gain of US$1.9 billion, Bunge said.

Second-quarter revenue was little changed at US$11 billion.

Meanwhile, Bunge dropped US$5.61, or 10%, to US$48.36 at 9:30 a.m. in NYSE composite trading, the biggest intraday percentage decline since April 23, 2009. The shares fell 15% this year through earlier.