Struggles for Bunge Global: Q4 and 2024 Earnings Disappoint

Bunge Global SA (BG) reported adjusted earnings of $2.13 per share for the fourth quarter of 2024, falling short of the Zacks Consensus Estimate of $2.30 by 7%. This figure represents a significant 42% decline compared to the same quarter last year.

Discover current EPS estimates and surprises on Zacks Earnings Calendar.

When accounting for one-time items, the company’s earnings per share reached $4.36, a slight increase from $4.18 in the previous year.

Bunge Global SA Price, Consensus and EPS Surprise

Bunge Global SA price-consensus-eps-surprise-chart | Bunge Global SA Quote

Net sales for Bunge Global reached $13.5 billion, down 9.3% from the year-ago quarter. However, this figure exceeded the Zacks Consensus Estimate of $12.8 billion.

Cost and Margin Performance in Q4

The cost of sales for Bunge was $12.46 billion, a 9% reduction from the prior year. Gross profit also dropped, down 13.8% year-over-year to $1.08 billion. Selling and administrative expenses recorded a 9% decrease, totaling $451 million.

Operating profit declined to $767 million, down 19% from the $951 million reported in the same quarter last year.

Adjusted total segment operating profit fell sharply by 47% year-over-year to $445 million. Consequently, total segment operating margin decreased by 230 basis points to 3.3% from the same quarter in 2023.

Segment Performance Overview in Q4

Agribusiness: The Agribusiness segment saw a 9.5% drop in sales, totaling $9.8 billion. The volume of sales decreased from 20,522 thousand metric tons last year to 19,965 thousand metric tons this year. Adjusted operating profit for this segment plunged to $364 million, a 43% year-over-year decline, as gains in merchandising were overshadowed by weaker processing results.

In merchandising, adjusted operating profit surged 167% to $123 million, largely due to improved performance in financial services, ocean freight, and global oils. This was partially offset by lower outcomes in global oils and included a $14 million business interruption recovery from BG’s Ukrainian operations. Conversely, the processing business’ adjusted operating profit dropped 59% year-over-year to $241 million, with higher soy crush results in Europe and Asia unable to offset losses in North America and South America.

Refined & Specialty Oils: This segment’s sales slipped by 7% year-over-year to $3.25 billion, while volumes increased slightly to 2,305 thousand metric tons from 2,272 thousand metric tons in the previous year. Adjusted operating profit fell 24.5% to $160 million, driven by lower margins in North America amidst supply and demand challenges, and declining performance in Europe, South America, and Asia.

Milling: Sales within this segment decreased by 11% from the previous year to $366 million, despite a volume increase of 7% to 897 thousand metric tons. Adjusted operating profit decreased by 20% to $24 million, as gains in North America were countered by reduced results in South America. Additionally, the non-core Sugar and Bioenergy segment was sold on October 1, 2024, contributing $11 million to adjusted operating profit for the fourth quarter, compared to $39 million in the prior year.

Cash Flow and Balance Sheet Updates

Operating cash flow totaled $1.9 billion in 2024, down from $3.3 billion in the prior year due to lower net income and changes in working capital. Cash and cash equivalents improved to $3.3 billion at the end of 2024, compared to $2.6 billion at the end of 2023.

Bunge Global’s long-term debt rose to $4.7 billion at the end of 2024, up from $4.1 billion a year earlier. The company repurchased $500 million of its shares during the fourth quarter.

Bunge’s Performance in 2024

For the full year of 2024, Bunge reported adjusted earnings of $9.19 per share, underperforming the Zacks Consensus Estimate of $9.35. This marks a 33% decrease compared to the prior year. The earnings also fell short of Bunge’s forecasted adjusted earnings per share of at least $9.25.

When including one-time items, earnings were reported at $7.99 per share, significantly down from $14.87 in 2023. Total revenues declined 11% year-over-year to $53.1 billion, missing the Zacks Consensus Estimate of $52.37 billion.

Outlook for 2025

Looking ahead, Bunge projects adjusted earnings per share of $7.75 for 2025, indicating a 15.7% decline from 2024. The Agribusiness segment is expected to experience lower results due to declines in processing, although there are hopes for improved performance in South America. Nonetheless, this might be offset by decreased results in North America and European softseeds. Margins in Merchandising are also expected to dip slightly from last year.

In the Refined and Specialty Oils segment, results for the full year are anticipated to decline from 2024, primarily due to a more balanced supply-demand condition in North America. However, the Milling segment is expected to see better results.

BG and Viterra: A New Agribusiness Giant

Bunge is making progress with its merger plans with Viterra, having secured most of the necessary regulatory approvals. The union aims to establish a leading agribusiness solutions company with an extensive global network, covering all major crop markets.

Bunge Stock Performance and Industry Comparison

Over the past year, Bunge Global’s shares have declined by 15.7%, contrasting sharply with the industry’s 2.4% growth.