Bunge's profit shoots up on soybean yields
percent on the back of increased soybean yields, provoking the
company to raise its outlook for the year, writes Philippa
The agricultural and food products company said its quarterly income grew to $98 million, or 82 cents per share, from $70 million, or 65 cents per share, during the same period last year. Analysts surveyed by Thomson Financial had expected earnings per share of 49 cents.
Revenue fell 5 percent to $5.45 billion from $5.74 billion, while the cost of goods sold fell 6 percent to $5.06 billion.
Alberto Weisser, Bunge's CEO, said in a statement that Bunge had benefited from overall strong fundamentals in the soy industry, namely ample global commodity supplies.
"The USDA estimates the world soybean crop at 219 million tons, a 16 percent increase over last year, despite the impact of the drought in southern Brazil," he said.
Moreover, he added that increases in CBOT soy prices during February and March helped stimulate farmer selling, especially in the US and Argentina.
Demand for global vegetable oil is also expected to rise by over seven percent compared to last year to 106 million tons.
Bunge therefore anticipates a good year, increasing its full-year earnings outlook to $4.06 to $4.23 per share, from $3.82 to $3.98 per share, "assuming stable currencies in South America and Europe and normal harvests in Europe and the Americas"; analysts estimate earnings per share at $3.98 for the year.
"Supplies of oilseeds and grains are ample and South American harvests are large, even if a bit smaller than originally expected," said Bill Wells, the company's chief financial officer. "Demand from our customers is strong as they seek to take advantage of lower prices and a weak U.S. dollar".