Bunge posts lower 2Q profit, sales on higher costsThe Associated Press
WHITE PLAINS, N.Y. -- Bunge Ltd. said Thursday that its net income fell 13 percent in the second quarter, as its agribusiness grappled with bad weather, rising costs for raw materials and other expenses.
The company, which sells and purchases huge amounts of grain, said its profit fell to $274 million, or $1.78 per share, during the quarter. That's compared with $316 million, or $2.02 per share, in the year-ago period.
Not including one-time items, Bunge earned $1.20 per share in the quarter. Analysts polled by FactSet on average expected a profit of $1.34 per share.
Like many agribusiness conglomerates, Bunge is facing higher prices for grain and other agricultural products.
Although Bunge didn't provide a specific full-year forecast, it noted that bad weather in Brazil that hit its sugar and bioenergy unit in the quarter has improved. It also said that its food and ingredients unit should do better as prices come in line with raw material costs. Its agribusiness unit is expected to continue to be strong.
For the three months ended June 30, sales rose 4 percent to $15.10 billion, but fell short of analysts' expectations of $15.55 billion. The cost of goods sold during the quarter rose 4 percent to $14.43 billion. Selling, general and administrative expenses rose 3 percent to $396 million.
The company's interest expense also rose as a result of higher debt, which it said was needed to cover higher prices for commodity inventories.
Bunge said that its agribusiness unit did well in the quarter, driven by strong performances in oilseed processing and grain merchandising in the company's South American operations. Unit sales rose to $10.58 billion, from $9.6 billion.
In the sugar and bioenergy unit, however, rainy weather in Brazil interrupted milling operations and reduced the sugar content of harvested sugarcane. That led to lower-than-expected industrial volumes and higher unit costs during an already seasonally weak period. The sugar and bioenergy business lost $28 million, compared with a profit $18 million a year earlier.
Shares of Bunge rose $2.28, or 3.7 percent, at $64.05.