Net income was $232 million for the quarter, up from $63 million a year ago. Earnings per share were $1.49.
Leading the way was the agribusiness segment, which had earnings of $253 million, up from $122 million a year ago. Higher results in the quarter were primarily due to strong performance in grain merchandising, which benefited from strong global demand for U.S. and South American exports, Bunge said.
Results in oilseed processing were lower, due to weaker volumes and margins. Lower volume in the quarter was primarily due to reduced European grain origination and softseed processing volumes resulting from the smaller 2010 crops in the Black Sea region. First quarter 2010 results included $14 million of impairment and restructuring charges.
"The agribusiness and food markets continue to be characterized by tight supply and volatility, resulting from a combination of factors, including weather and trade policy. While current conditions are likely to persist throughout the year, farmers around the world are responding to higher commodity prices with large plantings and ample use of crop inputs,” said Alberto Weisser, Bunge's chairman and chief executive officer. “South American harvests are near record levels and, weather permitting, U.S. farmers are expected to plant the largest acreage of major crops in nearly 25 years. Another season of large harvests will be an important step in rebuilding stocks and moderating prices.
"The current market environment puts a premium on an efficient, flexible supply chain and excellent risk management. These are some of Bunge's key strengths which allow us to deliver reliable service to customers and generate value for shareholders."
The first quarter is the inter-harvest period in Brazil when sugarcane mills in the Center-South region are not operating and are selling sugar and ethanol inventories from the previous cane harvest. High prices in the quarter were offset by low volumes due to the impact of dry weather on sugarcane yields in Brazil last year. First quarter 2010 results included $11 million of transaction-related expenses in connection with the Moema acquisition.
Strong results in Europe and North America were partially offset by lower results in our margarine business, which experienced aggressive competition.
Higher results in the quarter for milling products were due to stronger margins in wheat and corn milling, as well as the contribution of our U.S. rice milling business, which we acquired in the fourth quarter of 2010. Wheat milling benefited from the combination of high local sales prices and low raw material costs, as much of our inventory was purchased prior to the rise in global wheat prices. First quarter 2010 results included $3 million of impairment and restructuring charges.
First quarter is typically a low-volume period for fertilizer due to the seasonality of the South American planting season, which mostly occurs in the second half of the year. In the quarter, volumes were generally in line with expectations and margins were higher due to tight industry inventory levels in Brazil. Results in first quarter 2010 include operating results from our Brazilian nutrients business that we sold.
Drew Burke, chief financial officer, said, "In agribusiness, the favorable environment for our grain merchandising business should continue. Global demand is good and farmers around the world are responding to high agricultural commodity prices by increasing crop production. Oilseed processing margins in South America should benefit from higher utilization now that harvest is underway. Margins in Europe should improve later in the year when stocks are replenished during harvest. However, margins in the U.S. are likely to remain under pressure due to excess capacity.
"In sugar & bioenergy, tight global sugar supplies and strong demand for ethanol in Brazil should continue to be supportive of prices.
"Food & ingredients should continue to perform well. However, pricing pressures in edible oils will likely persist in certain markets, and wheat milling margins will likely decrease as low-cost raw material inventories are replaced at market prices.
"In fertilizer, strong farm economics should result in increased plantings and demand for fertilizer.
"Results in our fertilizer and sugar & bioenergy segments will be weighted to the second half of the year due to the seasonality of the businesses."
