Home All NewsBusiness NewsBunge lifts 2023 earnings view after Q2 profit beat, shares surge

Bunge lifts 2023 earnings view after Q2 profit beat, shares surge

by Reuters

By Karl Plume

(Reuters) – Bunge Ltd raised its full-year earnings outlook on Wednesday after improved processing margins helped the agri-trader post a second-quarter profit above Wall Street estimates, sending shares up sharply.

Bunge forecast full-year adjusted profit to be at least $11.75 per share on an improving margin outlook, up from guidance of $11 previously and above the average analyst estimate of $11.60, according to Refinitiv data.

Bunge shares were up 5.2% at $114.03, a 14-month high.

“Shares are up due to a strong quarter and raised guidance. The company continues to execute well in what remains a highly volatile macro environment,” said Arun Sundaram, senior equity analyst at CFRA Research.

The earnings beat comes as Bunge is working to close a merger deal with crop handler Viterra that would create a global agribusiness powerhouse worth about $34 billion with annual earnings projected around $4 billion.

Global grains merchants have capitalized on robust demand for food, animal feed and biofuel and higher crop prices due to a string of supply chain disruptions, most recently a war in major grains exporter Ukraine.

But profits for Bunge and grain trading rivals such as Archer-Daniels-Midland, Cargill and Louis Dreyfus, have moderated from record levels last year due to rising operating costs and tighter oilseed processing margins, which have now started to rebound.

ADM reported a drop in second-quarter profit last month but raised full-year guidance, citing improving market conditions in the second half of 2023.

Bunge said second-quarter adjusted earnings in Agribusiness, its largest segment in terms of sales and volumes, jumped 75% as a record-large Brazilian soybean crop boosted processing operations.

The surge more than offset mixed results from Bunge’s Refined & Specialty Oils unit and lower profit from its Milling segment.

Bunge’s adjusted profit was $3.72 per share for the three months ended June 30, compared with analysts’ estimate of $2.69 per share.

(Additional reporting by Saikeerthi in Bengaluru; Editing by Shilpi Majumdar, Nick Zieminski, Marguerita Choy, Kirsten Donovan)

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