Ironically, Noble's agribusiness segment dragged it down

It destroyed Noble's growth path.

According to CIMB, unlike its global peers Bunge and Cargill, Noble failed to ride on the tailwinds of improving agribusiness dynamics. Not only did 3Q12 fall short of our and consensus expectations, it also reversed the group’s earnings growth trajectory.

Here's more from CIMB:

Lacklustre 3Q12 core profit due to poor agriculture performance meant that 9M12 met only 59% of our FY12 forecast and 60% of consensus.

We cut our FY12-14 EPS and reduce our target price (10.1x CY14 P/E, 0.5SD below 5-year mean). While we expect near-term share price weakness, we maintain our Outperform rating as one quarter of weakness does not derail its long-term growth plans.

3Q12 revenue grew 9% to US$22.7bn and core net profit came in at US$67.1m, reversing year-ago losses, but sharply below our US$154m forecast.

What surprised us this quarter was the agriculture division’s poor showing. Despite new sugar assets and the peak harvesting season, agriculture revenue fell 34% yoy and 10% qoq, which management blamed on poor China crush margins and volatile corn and soybean prices.

The energy and metals, minerals & ores divisions fared relatively better, with gross profits up 42% and 38%, respectively.

Higher depreciation from the new sugar mills further dampened profit margins. Opex was also higher than expected, with selling and admin costs as a percentage of gross profits rising to 50% vs. the typical 44%.

The group has implemented costmanagement initiatives which it projects can reduce opex by US$100m a year, but the effects will take time to show.