Bunge raises 2022 outlook after quarterly earnings beat, stocks rally
CHICAGO, Oct 26 (Reuters) – Agricultural commodities trader Bunge Ltd (BG.N) raised its full-year profit outlook on Wednesday after third-quarter adjusted profit beat expectations, pushing its shares higher. more than 5%.
The tight global crop supply and strong demand has benefited supply chain intermediaries, including Bunge, which buys and sells crops like soybeans and corn and processes them into food, feed and biofuels.
But grain traders this year have had to contend with soaring energy costs and supply chain disruptions, including export delays at Ukraine’s Black Sea ports following its invasion by Russia.
“We delivered strong quarterly results in a changing operating environment,” said Chief Executive Gregory Heckman.
Agribusiness rival Archer-Daniels-Midland Co reported its highest-ever third-quarter profit on Tuesday and raised its profit outlook.
Bunge raised its full-year 2022 earnings forecast to $13.50 per share as earnings prospects for its major business segments improve. If true, it would be the third consecutive year of record profits for Bunge.
Tighter global supply and growing demand for vegetable oil for biofuel production is expected to drive above-normal profits over the next few years, Heckman said.
Bunge’s agribusiness unit posted mixed results in the quarter ended Sept. 30 as higher energy costs in Europe and lower demand in China due to COVID-19 restrictions offset stronger results from oilseed processing in the Americas.
The refined and specialty oils segment, however, posted stronger quarterly results.
Heckman said low water levels in the Mississippi River shifted crop exports during the peak U.S. export season from Gulf Coast facilities to ports in the Pacific Northwest and South America.
The company has also ramped up its processing pace in the United States to absorb excess supplies, he said.
Net income attributable to Bunge fell to $380 million, or $2.49 per share, from $653 million, or $4.28 per share, a year earlier.
Adjusted for one-time items, earnings were $3.45 per share, down from $3.72 per share in the same quarter last year, but above analysts’ consensus estimate of 2. $49.
Additional reporting by Arshreet Singh in Bengaluru; Editing by Bernadette Baum and Jan Harvey
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