January 19, 2012 / 3:42 PM / 6 years ago

UPDATE 2-Viterra shares stumble after disappointing Q4

* Q4 EPS misses expectations

* Raises dividend, has strong 2012 outlook

* Shares sag more than 7 pct in Toronto (Adds second analyst’s comments)

Jan 19 (Reuters) - Shares of Viterra fell more than 7 percent on Thursday morning, before recovering slightly, a day after Canada’s biggest grain handler reported disappointing quarterly results.

Viterra reported lower than expected fourth-quarter earnings of 3 Canadian cents a share on Wednesday, after markets had closed, although revenue of C$3.1 billion ($3.09 billion) topped expectations.

It’s “definitely disappointing” that Viterra missed expectations by a material amount after CEO Mayo Schmidt told Reuters in a Jan. 11 interview that he expected a strong quarter, said PI Financial Corp analyst Jason Zandberg.

For the year, Viterra’s profit jumped 83 percent to C$265 million. The company also boosted its semi-annual dividend by 50 percent to signal confidence in its future prospects.

Viterra said on Wednesday that global grain supply and demand fundamentals look strong for 2012 and that the end of the Canadian Wheat Board’s monopoly this year will add to its bottom line.

“As far as the positive outlook, the price of wheat will probably dictate farmers’ appetite to spend on farm inputs and so far it’s been weak in 2012,” Zandberg said.

Viterra’s strong outlook included a forecast for its global grain pipeline margin - a closely watched metric that captures profit on handling and marketing - to range from C$38 to C$41 per tonne, up from C$37 per tonne in fiscal 2011.

But analyst Robert Winslow of National Bank Financial said he sees the global margin slipping to C$36 per tonne, helping drag down earnings per share in 2012 to a Street-low estimate of 55 cents.

The company’s shares were down 51 Canadian cents, or 4.6 percent, at C$10.63 by late morning in Toronto.

$1=$1.01 Canadian Reporting by Rod Nickel in Winnipeg; editing by Rob Wilson

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