Bunge lifts 2022 outlook after quarterly earnings beat, shares rally

The sun sets behind grain elevators at the Bunge Grain facility along the Ohio River in Owensboro, Kentucky, U.S., September 16, 2017. REUTERS/Brian Snyder

CHICAGO, Oct 26 (Reuters) - Agricultural commodities trader Bunge Ltd (BG.N) on Wednesday raised its full-year earnings outlook after adjusted third-quarter profit topped expectations, sending its shares up more than 5%.

Tight global crop supplies and strong demand have benefited supply chain middlemen including Bunge, which buys and sells crops like soybeans and corn and processes them into food, feed and biofuel.

But grains merchants have this year had to weather 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 against the backdrop of a shifting operating environment," Chief Executive Gregory Heckman said.

Rival agribusiness Archer-Daniels-Midland Co on Tuesday reported its strongest ever third-quarter profit and raised its earnings outlook.

Bunge lifted its full-year 2022 earnings guidance to $13.50 per share as the profit outlook for its core business segments improved. If realized, it would be Bunge's third straight year of record-high earnings.

Tight global supplies and rising vegetable oil demand for producing biofuel are likely to drive above-normal earnings over the coming years, Heckman said.

Bunge's agribusiness unit posted mixed results in the quarter ended Sept. 30 as higher energy costs in Europe and weaker demand in China due to COVID-19 restrictions offset stronger oilseed processing results in the Americas.

The refined and specialty oils segment however turned in stronger quarterly earnings.

Heckman said low Mississippi River water levels had shifted crop exports during the peak U.S. export season from Gulf Coast facilities to the Pacific Northwest and South American ports.

The company also accelerated its U.S. processing pace to absorb excess supplies, he said.

Net income attributable to Bunge fell to $380 million, or $2.49 cents 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 a share in the same quarter last year but above the consensus analyst estimate for $2.49.

Additional reporting by Arshreet Singh in Bengaluru; Editing by Bernadette Baum and Jan Harvey

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Thomson Reuters

Chicago-based senior commodities correspondent covering agricultural markets, large agribusinesses and the food supply chain and specializing in global trade, farming technology and climate change issues impacting the industry.