Bunge lowers fiscal '08 e.p.s. guidance

by Eric Schroeder
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WHITE PLAINS, N.Y. — Citing soft demand for soybean products and an unfavorable exchange rate, Bunge Ltd. on Wednesday lowered its earnings per share projections for fiscal 2008 to $7.70 per share, down sharply from guidance of $11.60 to $11.90 per share announced in July 2008.

"In the fourth quarter, demand fell more than we anticipated," said Jacqualyn Fouse, chief financial officer. "Periods of soft demand are typically short lived in our industry, and we expect to see fundamentals improve during 2009. The U.S.D.A. forecasts global soybean meal consumption to be flat and vegetable oil to increase 4% in 2009 as compared to 2008. Stocks-to-use ratios of agricultural commodities remain near historically low levels. The recent increase in agricultural commodity prices has improved farm economics."

Ms. Fouse said Bunge is taking steps to lower costs and improve efficiency within its asset network. In doing so, she said the company expects to enter 2009 "with a comfortable liquidity position."

In addition to lowering its guidance, Bunge said it expects to record an after-tax charge of approximately $160 million related to counterparty risk in its agribusiness segment. The company also said it expects 2009 e.p.s. in the range of $6.90 to $7.60.

After closing at $48.17 per share on Jan. 13, Bunge shares plunged as much as 20% in early trading on Jan. 14.

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