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UPDATE 4-Bunge CEO: Board backs management after company earnings miss

(Recasts, includes comments by CEO and analysts)

By P.J. Huffstutter and Karl Plume

CHICAGO, Feb 14 (Reuters) - Agricultural merchant Bunge Ltd
reported a worse-than-expected loss for the fourth
quarter on Wednesday, the latest in a string of poor results
that has left the company's management fending off takeover bids
from rivals.

Several years of abundant grains supply on global markets
have made it tough for Bunge and its rivals to turn a profit on
their core business: buying, processing and selling corn, soy
and wheat.

That has left the sector open to consolidation, and Bunge
has received interest from both U.S. rival Archer Daniels
Midland Co and Swiss-based commodities trader Glencore
PLC.

"I have, and management has, the board's support," Chief
Executive Soren Schroder told Reuters in an interview after the
company reported a $69 million loss for the fourth quarter.

The loss, compared with a profit of $262 million a year
earlier, is likely to raise shareholder pressure on executives
to find a buyer or take more aggressive steps to shore up the
agribusiness division.

"They have taken corrective actions," said William Densmore,
senior director at FitchRatings, after the earnings were
announced.

"However, management credibility has lessened during the
past year and any further operating challenges in 2018 could
likely ratchet up the pressure."

Bunge, whose shares fell more than 5 percent in midday
trading, warned analysts the impact on margins of global grains
oversupply was expected to spill into the first quarter of 2018.

The company's management insisted for the fifth quarter in a
row their strategy would turn the company around.

Divestments including selling or shutting the firm's sugar
trading desk, changing shipping arrangements in South America
and focusing on grains and oilseeds businesses were all part of
that strategy, Schroder said.

Dutch food ingredients company Corbion said on
Wednesday it is in talks to buy Bunge's 49.9 percent stake in
their oil joint venture in Brazil.

HOPES FOR 2018

Schroder pointed to improving soybean crush margins in the
Americas and Europe, tightening global soymeal supplies and
rising demand as motives for optimism for results in 2018.

The company should also make savings on shipping costs due
to changes it has made in hauling contracts in South America, he
said.

Schroder has forecast a brighter agribusiness outlook for
more than a year, yet the segment, its largest in terms of
revenues and volumes, has struggled.

Bunge was forced to lower agribusiness earnings guidance for
three straight quarters in 2017. On Wednesday, the company
warned 2018 earnings for the segment would be well below
historical averages.

MERGER TALK

Schroder declined to comment on market and media reports
about Bunge being approached by rivals ADM and Glencore.

Less than a year ago, Schroder had said he would like to
lead consolidation in the global grains industry.

In November, Bunge sweetened compensation packages for top
executives in the case of a takeover, according to the company's
regulatory filings.

The company and other agricultural traders, including ADM
and Cargill, have been trying to diversify into
higher-margin sectors such as food ingredients and aquaculture
to compensate for the poor returns on their traditional grain
handling businesses.

Bunge said fourth-quarter 2017 sales in its agribusiness
segment fell 3.5 percent to $7.90 billion even as volumes rose.

On an adjusted basis, Bunge earned a profit of 67 cents a
share in the quarter, against analyst expectations for $1.37 per
share, according to Thomson Reuters I/B/E/S.

The company reported a net loss of 48 cents per share, which
includes charges related to restructuring.

Bunge took a $66 million charge due to tax law changes in
the United States and Argentina.

Net sales fell 1.6 percent to $11.61 billion.
(Additional reporting by Anirban Paul in Bangalore. Editing by
Simon Webb and Marguerita Choy)

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