* Q3 EPS $1.62; Street view $1.47
* Agribusiness results strong, fertilizer weak
* Cuts full-year outlook to $3.10-$3.50 per share
* Shares fall nearly 5 percent
(Recasts, adds quotes, updates share price, adds byline)
By Karl Plume
CHICAGO, Oct 22 Bunge Ltd (BG.N) slashed its
2009 profit forecast amid weak demand for its fertilizer,
overshadowing better-than-expected quarterly earnings and
sending its shares down nearly 5 percent.
Although New York-based Bunge projected a rosier 2010,
near-term uncertainty helped to guide its shares lower,
"They dramatically lowered guidance for the year, and the
outlook for 2010 is still a little uncertain at this point,"
said Christina McGlone, analyst with Deutsche Bank Securities.
"Most people are valuing off of 2010, but where before they
were giving them the benefit of the doubt, I think it has
transitioned to a 'prove it' story."
Bunge's agribusiness and edible oils divisions posted
strong results for the third quarter, but its fertilizer
business, the largest in South America, posted its fourth
consecutive quarterly loss.
The company reported on Thursday that third-quarter net
profit fell to $232 million, or $1.62 per share, from $234
million, or $1.70 a share, a year earlier.
Analysts on average had expected $1.47 per share, according
to Thomson Reuters I/B/E/S.
Revenue dropped 24 percent to $11.3 billion. Wall Street
had expected $12.02 billion.
Bunge cut its full-year earnings forecast to a range of
$3.10 to $3.50 per share, citing a weaker-than-anticipated
near-term fertilizer outlook. It previously forecast $4.90 to
"Fertilizer weakness will continue for the remainder of
this year as it stems mainly from our high-cost average
inventory versus the current pricing environment. We expect
this to improve in 2010," said Jacqualyn Fouse, Bunge's chief
Poor fertilizer margins led to a $127 million net loss in
the segment in the third quarter as sales in Brazil have been
subdued by farmers' credit constraints. Also, farmers there are
cutting back seedings of nutrient-intensive corn and cotton in
favor of soybeans, which do not require as much fertilizer.
Fertilizer makers have been hit hard by falling prices and
sluggish demand as farmers have scaled back applications after
grain prices plunged from record highs last year.
Potash Corp of Saskatchewan (POT.TO), the world's largest
fertilizer producer, reported an 80 percent decline in
third-quarter profit on Thursday, and rival Mosaic Co (MOS.N)
reported a 91 percent drop in fiscal first-quarter profit
earlier this month. Others have posted similarly weak results.
However, Bunge and other fertilizer makers have expressed
optimism that stronger farm profits in 2010 would boost use,
while fertilizer margins should improve as high-cost
inventories are sold off.
Bunge said agribusiness profit rose 73 percent to $294
million in the quarter, while edible oil product profit reached
$35 million, compared with a year-earlier loss of $29 million.
Bunge said tight soybean supplies in drought-hit Argentina
and strong demand for soybeans from China aided its U.S. and
Brazilian grain origination businesses.
Bunge shares were down 4.6 percent at $63.81 in afternoon
trading on the New York Stock Exchange. The stock hit a 7-1/2
week high early this week.
(Reporting by Karl Plume; Editing by Lisa Von Ahn and John