Why Bunge Limited's Shares Dropped
Feb 7th 2013 9:06PM
Updated Feb 7th 2013 10:05PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of ag company Bunge Limited fell 10% today, after the company released earnings.
So what: The company's revenue rose 9%, to $17.0 billion, but analysts had set their sights on $18.69 billion. To make matters worse, the company reported a $610 million loss when you include a $683 million one-time charge. Even if you take out the charge, the adjusted earnings per share of $0.57 was well short of the $2.36 analysts expected.
Now what: A big loss at the company's risk management division was blamed for most of the disappointment, and the company sees this as a one-time event. CEO Alberto Weisser also said he will step down as of June 1 after 14 years on the job. This was a disappointing quarter for the company, but with the need for food only growing, and shares now trading at nine time forward earnings, I think this is a buying opportunity for investors.
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The article Why Bunge Limited's Shares Dropped originally appeared on Fool.com.Fool contributor Travis Hoium has no position in any stocks mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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