July 23, 2009 / 11:29 AM / 8 years ago

UPDATE 3-Bunge Q2 profit tops estimate, shares jump

* Adj Q2 EPS $2.13 way above Street view of 90 cts

* Strength in agribusiness unit, net loss in fertilizer

* Keeps '09 EPS forecast of $4.90-$5.40

* Shares jump (Recasts, adds details, quotes, share price)

By Karl Plume

CHICAGO, July 23 (Reuters) - Agricultural company Bunge Ltd (BG.N) posted a lower but much-better-than-expected quarterly profit on Thursday, sending shares up sharply.

Following losses in each of the last two quarters, the oilseed processor and fertilizer producer's profit offered renewed optimism for the agricultural sector, which has been hit hard as the recession has slowed demand for raw materials.

Bunge said strong results in its agribusiness segment more than offset a net loss in its fertilizer business, which has suffered from reduced sales and falling prices for fertilizers produced at a higher cost.

"We remain optimistic for a solid second half of the year," said Bunge Chairman and CEO Alberto Weisser.

"We continue to work through some remaining high-cost raw material inventory in our fertilizer segment, but good demand and improved international phosphate pricing should benefit our fertilizer margins," he added.

New York-based Bunge said it expects a stronger second half of the year, with results weighted more heavily to the fourth quarter, when the Northern Hemisphere's harvest season is under way and the fertilizer economics improve.

Yet the company maintained its full-year earnings forecast for $4.90 per share to $5.40 per share, a target that Morgan Stanley analyst Vincent Andrews noted would require Bunge to have the second-best back half since the company went public in 2001.

Bunge shares were up $2.91 or 4.5 percent to $68.35 in afternoon trading on the New York Stock Exchange. Shares of giant agribusiness rival Archer Daniels Midland Co (ADM.N), which is scheduled to report earnings on Aug. 4, were also up 5 percent at $30.96.

NET TUMBLES

Bunge's second-quarter net profit came to $313 million, or $2.28 a share, down 58 percent from a year-earlier profit of $751 million, or $5.45 a share.

But adjusted earnings per share of $2.13, which excluded a $32 million credit in transactional taxes, handily exceeded the consensus analyst forecast of 90 cents per share, according to Reuters Estimates.

Net sales fell 23 percent to $10.99 billion.

Bunge cited strong demand for soybeans from China, good margins and improved demand for soymeal, and increased grain volumes in Europe for the results at its agribusiness unit, where profit was still down 27 percent from a year ago but showed improvement from the previous three quarters' poor results.

Profit for Bunge's edible oil products fell 33 percent, pressured by lower volume and margins in Brazil. Its milling products profit fell 75 percent as wheat milling margins narrowed.

Bunge, the largest producer and supplier of fertilizer in South America, said its fertilizer unit reported a net loss versus a year-earlier profit, hurt by a $121 million inventory write-down, weaker fertilizer prices and lower volumes.

The weak prices and lower sales also plagued competing fertilizer producers Potash Corp (POT.TO) (POT.N) and Mosaic Co (MOS.N),, which both reported sharp profit declines earlier this week. [ID:nN22333827] [ID:nBNG368711] (Reporting by Karl Plume; Editing by Gerald E. McCormick and Maureen Bavdek)

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