(Bloomberg) -- Bunge Global SA’s shares slumped as the agribusiness giant reaffirmed the outlook for weaker profits even as first-quarter earnings beat estimates.

“While we are off to a strong start, we continue to have limited visibility into the back half of the year,” Chief Executive Officer Greg Heckman said in a statement Wednesday. The company said in a conference call with analysts it expects earnings in the second quarter to be “a little bit softer” after some “over-delivery” in the first three months of the year.

Earnings per share — excluding some unrealized losses associated with the fair valuation of forward contracts and inventories — fell 6.7% from a year earlier to $3.04, the St. Louis, Missouri-based company said. That compares with the $2.57 average of analyst estimates compiled by Bloomberg. 

Bunge shares dropped as much as 6.6% in early trading in New York, the biggest intraday decline in more than a year. The stock had rallied 27% from a low in February ahead of the earnings release.

Crop traders and processors, which over the past few years made huge profits off major harvest losses and disruptions caused by Russia’s invasion of Ukraine, now are being slammed by lower prices amid a rebound in global stockpiles and fading demand. An increase in soybean processing capacity in the US is also weighing on margins for meal and oil production, eroding profits for crushers.

Underscoring the difficulties faced by crop traders, Heckman said soybean farmers have responded to lower prices by being “pretty stubborn about selling,” while the “buyers of the finished products have now been paid to wait, to buy in the spot, as prices have moved lower.”

“That’s what happens as you transition from multi years of higher prices,” he said during the call, adding that companies are also holding less safety inventories due to ampler supplies.  

Bunge’s revenue in the three-month period ended March shrank more than 12% from a year earlier to $13.4 billion, trailing projections. The company kept its 2024 earnings outlook at $9 per share, which is less than projected by analysts. 

The Bloomberg Grain Spot Index, which tracks futures for soybeans, corn and wheat, averaged the lowest since 2020 in the first quarter. 

Still, Bunge saw profits at its oilseed processing business — which includes the origination and crushing of soybeans and canola — increase slightly from a year ago, driven by higher results in Europe and Asia. That was more than offset by a decline in earnings from its merchandising operations, which involve the trading and distribution of grains. 

The industry downturn comes at a time when Bunge is seeking to expand and further diversify its operations through the proposed acquisition of Glencore Plc-backed Viterra Inc. The company said on Tuesday it expects the $8.2 billion deal to close in the middle of the year even as Canada’s antitrust watchdog has raised red flags over how the combination will impact competition.

The company said it repurchased roughly $400 million of its own shares in the first quarter as part of a $2 billion plan. 

--With assistance from Tarso Veloso.

(Adds comments from earnings call and share move beginning in second paragraph.)

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