UPDATE 2-Bunge again cuts earnings outlook amid grains glut

(Rewrites throughout, adds detail on cost cutting and consolidation, adds byline)

CHICAGO, Nov 1 (Reuters) - U.S. agricultural commodities trader Bunge Ltd cut earnings guidance for its core agribusiness unit for a third straight quarter on Wednesday after reporting a 28-percent drop in third-quarter profit.

A global oversupply of crops has hammered profits in the grain trading and processing units of Bunge and its chief rivals, forcing rounds of cost-cutting that look to spill into 2018.

The companies are trying to diversify through acquisitions into higher-margin businesses, such as food ingredients, but results have been slow to offset the continued challenges to their mainstay trading business from the supply glut.

On Tuesday, rival grains trader Archer Daniels Midland Co reported its earnings fell 44 percent from a year earlier on restructuring and other charges and said it didnt see conditions improving next year.

Third-quarter profit for Bunge's agribusiness unit, its largest in terms of volume and revenue, rose about 2.5 percent from the same quarter last year, but the gain fell short of Bunge's expectations.

The company said it expects 2017 earnings before interest and taxes (EBIT) of $425 million to $500 million in agribusiness. The company had previously forecast full-year EBIT of $550 million and $650 million for agribusiness, which makes money trading, storing and processing crops.

Although South American farmers harvested bumper corn and soy crops this year, low prices prompted them to store more of the bounty in hopes of higher prices later, hurting processing operations. Plentiful global supplies, meanwhile, have blunted demand from end-users such as feed companies and importers, limiting trading opportunities for Bunge and other traders.

Bunge executives have said overcapacity is moving the industry toward consolidation and they are prepared to lead it, but the company itself was the target of a takeover attempt by rival commodities trader Glencore Plc in May, which it rebuffed.

Bunge has since announced cost cutting and restructuring initiatives to halt a profit slump. It also issued about $1 billion in debt to secure a controlling stake in a Malaysian palm oil company to bolster its higher margin edible oils business.

Bunge said net income available to shareholders fell to $84 million, or 59 cents per share, in the quarter ended Sept. 30 from $116 million, or 83 cents per share, a year earlier.

Excluding items, a profit of 75 cents per share beat the average analyst estimate of 73 cents, according to Thomson Reuters I/B/E/S.

Net sales were flat at $11.42 billion. (Additional reporting by Akshara P in Bengaluru; Editing by Saumyadeb Chakrabarty and Bernadette Baum)