Bunge Limited
BG
reported fourth-quarter 2021 adjusted earnings of $3.49 per share, which surpassed the Zacks Consensus Estimate of $3.05 by a margin of 14%. The bottom line improved 14% year over year aided by improved performances in Agribusiness and Refined & Specialty Oils.
Including one-time items, the company posted earnings per share of $1.52 in fourth-quarter 2021 compared with $3.74 in the year-ago quarter.
Net sales were $16.7 billion in the quarter under review, up 32% from the year-ago quarter’s $12.6 billion. The top line beat the Zacks Consensus Estimate of $15.5 billion.
Cost of sales was $16 billion in the fourth quarter surged 37% from the prior year. Gross profit plunged 24% year over year to $689 million. Selling and administrative expenses were $338 million, which decreased 7% year over year. Adjusted segment operating profit was $680 million, reflecting year-over-year growth of 17% from $583 million in the year-ago quarter. Operating margin was 4.1% compared with 4.6% in the fourth quarter of 2020.
Bunge Limited Price, Consensus and EPS Surprise
Bunge Limited price-consensus-eps-surprise-chart
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Bunge Limited Quote
Segment Performance
Agribusiness
: The segment’s sales were $12.3 billion compared with the prior-year quarter’s $9.4 billion. Adjusted segment operating profit improved 19.5% year over year to $595 million. Results were aided by strong execution throughout the value chains.
Refined & Specialty Oils
: The segment’s sales improved 39% year over year to $3.76 billion in the fourth quarter. The segment reported an adjusted operating profit of $154 million in the quarter, against the year-ago quarter’s $112 million aided by higher margins in North America and Europe, which benefited from strong food and fuel demand. However, results in South America and Asia were down due to lower margins and volumes.
Milling
: The segment’s sales increased 20% year over year to $517 million in the fourth quarter. The segment reported an adjusted operating profit of $17 million in the quarter, down from the year-ago quarter’s $26 million. Improved results in North America were offset by weak results in Brazil due to lower margins.
Sugar & Bioenergy
: Net sales soared 371% year over year to $80 million. Adjusted operating profit was $20 million in the quarter, a 26% decline year over year as lower ethanol volume offset higher sugar and ethanol prices.
Financial Position
Cash and temporary investments aggregated $902 million as of the fiscal 2021 end compared with $352 million as of the end of fiscal 2020. At the end of 2021, its long-term debt was at around $4.8 billion, up from $4.4 billion as of 2020-end. Cash flow used in operating activities was $2.9 billion in 2021 compared with $3.5 billion in the prior year.
Fiscal 2021 Performance
For fiscal 2021, Bunge Limited’s adjusted earnings was $12.93, which beat the Zacks Consensus Estimate of $12.46. Earnings was 56% higher than the prior fiscal. Including one-time items, the company’s earnings was $13.64 per share in fiscal 2021 compared with $7.71 in fiscal 2020.
Total revenues surged 43% year over year to around $59.2 million, which surpassed the Zacks Consensus Estimate of $57.3 million.
Fiscal 2022 Outlook
Bunge Limited expects a favorable market environment to continue in 2022. The company projects adjusted earnings per share of at least $9.50 per share in 2022. If achieved, it would be the second-highest operational performance in the company’s recent history.
In Agribusiness, results will be down from a record 2021, due to lower results in Merchandising and softseed crushing, which had exceptionally strong prior years. Refined and Specialty Oils, full-year results are expected to be higher than 2021 driven by strong demand from food and fuel in the North American and European businesses. In Milling, full-year results are expected to improve year over year on the back of improved market conditions in Brazil. In Non-Core, full-year results in the sugar and bioenergy joint venture are expected to be in line with 2020.
Price Performance
Image Source: Zacks Investment Research
Shares of Bunge Limited have gained 30% over the past year, compared with the
industry
‘s rally of 10.3%.
Zacks Rank & Other Stocks to Consider
Bunge Limited currently carries a Zacks Rank #1 (Strong Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Some other top-ranked stocks in the basic materials space include
Commercial Metals Company
CMC
,
Teck Resources
TECK
and
Huntsman Corporation
HUN
. While CMC and TECK sport a Zacks Rank #1, HUN carries a Zacks Rank #2 (Buy).
Commercial Metals has a projected earnings growth rate of 62% for the current fiscal year. The Zacks Consensus Estimate for CMC’s current fiscal year earnings has been revised upward by 23% over the past 60 days.
Commercial Metals beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters and missed once, the average surprise being 13.1%. CMC’s shares have surged around 61% in a year’s time.
Teck Resources has an expected earnings growth rate of 14.3% for the current year. The Zacks Consensus Estimate for TECK’s current-year earnings has moved up 22% in the past 60 days.
Teck Resources beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 17.4%. TECK has rallied around 83% in a year.
Huntsman has an expected earnings growth rate of 10% for the current year. HUN’s consensus estimate for the current year has been revised upward by 1% over the past 60 days.
Huntsman beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 12.8%. HUN shares have appreciated around 32% in a year.
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