By Karl Plume
CHICAGO (Reuters) -Global crop trader and processor Bunge beat Wall Street expectations for third-quarter profit on Thursday on solid oilseed crushing results and good global demand, though earnings were lower year-on-year.
Bunge raised its full-year outlook for a second straight quarter on favourable margins and solid results in the year to date, forecasting adjusted earnings of $12.50 a share, up from guidance of $11.75 a share previously.
The earnings beat comes as Bunge is working to close a merger deal with crop handler Viterra by mid-2024 that would create a global agribusiness powerhouse but which has sparked scrutiny from regulators.
Strong Brazilian crop exports following record corn and soy harvests and soaring demand for vegetable oils to make renewable fuels have helped lift revenue for Bunge and agribusinesses peers such as Archer-Daniels-Midland and Cargill but rising costs, volatile markets and supply disruptions in places like drought-hit Argentina and war-torn Ukraine have dented earnings at times.
Bunge's Agribusiness segment, its largest in terms of volumes and revenue, posted an 11% drop in adjusted profit. Gains from good oilseed processing in Brazil, Asia and North America and higher corn merchandising were more than offset by lower wheat merchandising and poor soy processing results in Argentina.
Earnings from its Refined & Specialty Oils segment, its second largest, were up 18% at $230 million in the quarter.
The higher results in the refined & specialty oils segment were primarily driven by North America, with Asia also contributing to the improved performance.
The company reported an adjusted profit of $2.99 per share for the three months ended Sept. 30, higher than analysts' average estimate of $2.50 per share, according to LSEG data, but down from adjusted earnings of $3.45 a share in the same quarter last year.
(Additional reporting by Tanay Dhumal in Bengaluru; Editing by Tasim Zahid and Susan Fenton)
