Bunge Posts Surprise Loss After Wrong-Way Bet on Grain

Bunge Ltd. (BG), an agricultural-commodity trader, posted a surprise first-quarter loss after harsh U.S. winter weather and political unrest in the Ukraine wrong-footed the company’s bet on grain prices.

Excluding one-time items, the loss was 12 cents, the White Plains, New York-based company said today in a statement. The average of 13 analysts’ estimates was for a profit of $1.40. Sales dropped 9 percent to $13.5 billion, trailing the $15.1 billion average estimate.

Chief Executive Officer Soren Schroder said in the statement that the biggest factor in the quarter’s results was the loss from Bunge’s grain-trading and distribution unit. While the segment anticipated lower grain prices, the opposite occurred because of Ukraine and the deteriorating conditions for the U.S. winter wheat crop, the company said. Ukraine is the world’s third-largest corn exporter.

The company also said today it’s still looking for “strategic alternatives” for its Brazilian sugarcane business. Bunge said in February it hired Morgan Stanley to advise on options for the underperforming unit.

Bunge’s net loss for the quarter was $27 million, or 18 cents a share, compared with year-earlier net income of $170 million, or $1.15.

To contact the reporter on this story: Simon Casey in New York at scasey4@bloomberg.net

To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net Tina Davis, Alex Devine

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