Bunge shares slide after quarterly profit miss

Bunge BG-N missed Wall Street expectations for second-quarter profit on Wednesday, sending shares down nearly 6% before the opening bell, as narrower processing margins hurt the grain trader.

Ample global supplies of soybeans and corn are keeping crop prices near four-year lows and discouraging farmers from selling their harvests, squeezing global traders and oilseed processors.

Adjusted earnings in Bunge’s agribusiness segment, its largest by revenue and volume, in the April-June quarter fell 55% from a year ago to $298 million. Its processing business suffered as higher results in European soy crushings were offset by lower results in North and South America and Asia.

In the merchandising business, which includes grain trading and purchasing, quarterly adjusted earnings sank by 78% from last year to $33 million.

“Lower results were primarily driven by global grains, where higher volumes were more than offset by lower margins,” Bunge said.

Bunge still raised its full-year adjusted profit forecast to $9.25 per share from $9.00 per share and said market conditions have improved in some regions.

The company posted an adjusted profit of $1.73 per share for the quarter, compared with analysts’ estimates of $1.80 per share, according to LSEG data.

Rival trader Archer-Daniels-Midland on Tuesday also missed Wall Street expectations for quarterly profit due to lower soy crush margins and waning demand for U.S. crops.

Top soy importer China is facing an oversupply of soybeans at a time when animal-feed demand remains subdued. The soybean surplus also threatens to curb China’s appetite for imports in the September-December period, the peak marketing season for U.S. soybeans.

Separately, Bunge said that integration plans are progressing for its proposed $34 billion merger with Glencore-backed Viterra.

The deal is heading toward conditional EU antitrust approval, a person with direct knowledge of the matter said last week.