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International Flavors (IFF) Down 11.1% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for International Flavors (IFF - Free Report) . Shares have lost about 11.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is International Flavors due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
International Flavors' Q4 Earnings & Sales Beat Estimates
International Flavors & Fragrances reported adjusted earnings of $1.10 per share in fourth-quarter 2021, beating the Zacks Consensus Estimate of $1.04. The bottom line declined 17% from the year-ago quarter’s levels.
Including one-time items, the company reported earnings per share of 35 cents compared with the prior-year quarter’s 57 cents.
International Flavors’ net sales came in at $3,031 million in the December-end quarter, surging 139% year over year. This was driven by the additional sales related to the merger with DuPont de Nemours, Inc.’s Nutrition & Biosciences (N&B) business. The top line surpassed the Zacks Consensus Estimate of $2,960 million. During the October - December quarter, currency-neutral sales were up 10%, aided by a double-digit increase in Health & Biosciences and high-single-digit growth in Nourish, Pharma Solutions & Scent.
Operational Highlights
During the reported quarter, International Flavors’ adjusted cost of goods sold was significantly up 170% year over year to $2,044 million. Adjusted gross profit climbed 92% year over year to $987 million. Adjusted gross margin came in at 32.6% compared with 40.5% in the year-ago quarter.
Research and development expenses flared up 64% year over year to $166 million. Adjusted selling and administrative expenses shot up 92% year on year to $403 million during the fourth quarter. Adjusted operating EBITDA came in at $529 million, up 123% from the prior-year quarter’s $237 million due to the incremental profit related to the merger with N&B. Adjusted operating EBITDA margin was 17.4% compared with the year-earlier quarter’s 18.7%.
Segmental Performances
Revenues in the Nourish segment soared 128% year over year to $1,626 million during the December-end quarter. Adjusted operating EBITDA was $251 million, reflecting year-over-year growth of 88.7%.
Revenues generated in the Health & Bioscience segment came in at $646 million compared with the year-earlier quarter’s $35 million. Adjusted operating EBITDA was $156 million in the quarter compared with $11 million in the prior-year quarter.
Scent segment revenues came in at $555 million compared with the year-ago quarter’s $523 million. Adjusted operating EBITDA declined 5.4% year over year to $88 million.
Revenues in Pharma Solutions were $204 million in the fourth quarter. Adjusted operating EBITDA was $34 million.
Financial Position
International Flavors had cash and cash equivalents of $715 million at the end of 2021, up from the $657 million witnessed at the end of 2020. Long-term debt increased to $10.8 billion in 2021, from $3.8 billion in 2020.
International Flavors generated $1,437 million of cash from operating activities in 2021, compared with the prior-year’s $714 million. Capital invested in purchasing property, plant and equipment totaled $393 million in 2021 compared with $192 million in 2020. Dividend paid summed $667 million in 2021.
2021 Performance
International Flavors reported an adjusted EPS of $5.63 in 2021 compared with $5.70 reported in the prior year. Earnings beat the Zacks Consensus Estimate of $5.60. Including one-time items, the bottom line came in at $1.10, down 65.7% from $3.21 reported in 2020. Sales were up 129% year over year to $11.7 billion. The top line surpassed the Zacks Consensus Estimate of $11.6 billion.
2022 Guidance
International Flavors estimates sales to be around $12.3 billion to $12.7 billion in 2022. Adjusted EBITDA is expected between $2.5 billion and $2.6 billion. The adjusted EBITDA margin is projected to grow 4-8% on a currency-neutral basis. Currency-neutral sales growth for the year is expected to be around 6% to 9%. However, foreign currency translation is likely to affect sales growth by 2 percentage points (PP) and adjusted operating EBITDA growth by 4 PP.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -9.4% due to these changes.
VGM Scores
At this time, International Flavors has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, International Flavors has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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International Flavors (IFF) Down 11.1% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for International Flavors (IFF - Free Report) . Shares have lost about 11.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is International Flavors due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
International Flavors' Q4 Earnings & Sales Beat Estimates
International Flavors & Fragrances reported adjusted earnings of $1.10 per share in fourth-quarter 2021, beating the Zacks Consensus Estimate of $1.04. The bottom line declined 17% from the year-ago quarter’s levels.
Including one-time items, the company reported earnings per share of 35 cents compared with the prior-year quarter’s 57 cents.
International Flavors’ net sales came in at $3,031 million in the December-end quarter, surging 139% year over year. This was driven by the additional sales related to the merger with DuPont de Nemours, Inc.’s Nutrition & Biosciences (N&B) business. The top line surpassed the Zacks Consensus Estimate of $2,960 million. During the October - December quarter, currency-neutral sales were up 10%, aided by a double-digit increase in Health & Biosciences and high-single-digit growth in Nourish, Pharma Solutions & Scent.
Operational Highlights
During the reported quarter, International Flavors’ adjusted cost of goods sold was significantly up 170% year over year to $2,044 million. Adjusted gross profit climbed 92% year over year to $987 million. Adjusted gross margin came in at 32.6% compared with 40.5% in the year-ago quarter.
Research and development expenses flared up 64% year over year to $166 million. Adjusted selling and administrative expenses shot up 92% year on year to $403 million during the fourth quarter. Adjusted operating EBITDA came in at $529 million, up 123% from the prior-year quarter’s $237 million due to the incremental profit related to the merger with N&B. Adjusted operating EBITDA margin was 17.4% compared with the year-earlier quarter’s 18.7%.
Segmental Performances
Revenues in the Nourish segment soared 128% year over year to $1,626 million during the December-end quarter. Adjusted operating EBITDA was $251 million, reflecting year-over-year growth of 88.7%.
Revenues generated in the Health & Bioscience segment came in at $646 million compared with the year-earlier quarter’s $35 million. Adjusted operating EBITDA was $156 million in the quarter compared with $11 million in the prior-year quarter.
Scent segment revenues came in at $555 million compared with the year-ago quarter’s $523 million. Adjusted operating EBITDA declined 5.4% year over year to $88 million.
Revenues in Pharma Solutions were $204 million in the fourth quarter. Adjusted operating EBITDA was $34 million.
Financial Position
International Flavors had cash and cash equivalents of $715 million at the end of 2021, up from the $657 million witnessed at the end of 2020. Long-term debt increased to $10.8 billion in 2021, from $3.8 billion in 2020.
International Flavors generated $1,437 million of cash from operating activities in 2021, compared with the prior-year’s $714 million. Capital invested in purchasing property, plant and equipment totaled $393 million in 2021 compared with $192 million in 2020. Dividend paid summed $667 million in 2021.
2021 Performance
International Flavors reported an adjusted EPS of $5.63 in 2021 compared with $5.70 reported in the prior year. Earnings beat the Zacks Consensus Estimate of $5.60. Including one-time items, the bottom line came in at $1.10, down 65.7% from $3.21 reported in 2020. Sales were up 129% year over year to $11.7 billion. The top line surpassed the Zacks Consensus Estimate of $11.6 billion.
2022 Guidance
International Flavors estimates sales to be around $12.3 billion to $12.7 billion in 2022. Adjusted EBITDA is expected between $2.5 billion and $2.6 billion. The adjusted EBITDA margin is projected to grow 4-8% on a currency-neutral basis. Currency-neutral sales growth for the year is expected to be around 6% to 9%. However, foreign currency translation is likely to affect sales growth by 2 percentage points (PP) and adjusted operating EBITDA growth by 4 PP.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -9.4% due to these changes.
VGM Scores
At this time, International Flavors has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, International Flavors has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.