International Flavors & Fragrances Inc. (IFF - Free Report) reported adjusted earnings of 97 cents per share in fourth-quarter 2022, beating the Zacks Consensus Estimate of 94 cents. The bottom line declined 12% from the year-ago quarter.
Including one-time items, the company reported earnings of 1 cent per share compared with the prior-year quarter’s 35 cents.
International Flavors’ net sales came in at $2,844 million in the December quarter, down 6.2% from the year-ago quarter. The top line missed the Zacks Consensus Estimate of $2,879 million. During the quarter, currency-neutral sales were up 4%, aided by double-digit growth in Pharma Solutions, and mid-single-digit growth in Scent and Nourish segment.
Operational Highlights
During the reported quarter, International Flavors’ cost of goods sold was down 3.7% year over year to $1,975 million. Gross profit fell 11.4% to $869 million. The gross margin came in at 30.6% compared with 32.4% in the year-ago quarter.
Research and development expenses declined 13.9% year over year to $143 million. Selling and administrative expenses were down 2.2% to $440 million during the fourth quarter. Adjusted operating EBITDA came in at $441 million, down 16.6% from the prior-year quarter’s $529 million.
On a comparable basis, currency-neutral adjusted operating EBITDA decreased 5% from the prior year. Strong pricing actions and productivity gains helped offset the impact of lower volumes. Adjusted operating EBITDA margin was 15.5% compared with the year-ago quarter’s 17.5%.
Segmental Performances
Revenues in the Nourish segment dipped 3% year over year to $1,577 million during the December quarter. Adjusted operating EBITDA was $195 million, down 22.3%.
Revenues generated in the Health & Bioscience segment were $501 million compared with the year-earlier quarter’s $646 million. Adjusted operating EBITDA was $121 million in the quarter compared with $156 million in the prior-year quarter.
The Scent segment’s revenues came in at $545 million compared with the year-ago quarter’s $555 million. Adjusted operating EBITDA increased 8% to $95 million.
Revenues in Pharma Solutions were $221 million in the fourth quarter, gaining 8.3% year over year. Adjusted operating EBITDA declined 11.8% to $30 million.
Financial Position
International Flavors had cash and cash equivalents of $483 million at the end of 2022, down from $711 million witnessed at the end of 2021. Long-term debt was $10.4 billion at the fourth quarter’s end compared with $10.8 billion at 2021-end.
International Flavors utilized $345 million cash in operating activities in 2022, down from $1,443 million in the prior year.
Comparable currency-neutral adjusted operating EBITDA growth for 2023 is expected to be approximately flat with the prior year.
2022 Performance
The company reported adjusted earnings of $5.55 per share in 2022, beating the Zacks Consensus Estimate of $5.54. The bottom line declined 1% from 2021’s reported figure.
Including one-time items, the company reported a loss of $7.21 per share against the prior year’s earnings of $1.10.
International Flavors’ net sales came in at $12.44 billion in 2022, up 6.7% from a year ago. The top line missed the Zacks Consensus Estimate of $12.47 billion. During the year, currency-neutral sales were up 9%, aided by double-digit growth in the Pharma and Nourish segments.
2023 Guidance
International Flavors expect sales for fiscal 2023 to be around $12.5 billion. Comparable currency-neutral sales growth for 2023 is projected to be around 6%.
Adjusted EBITDA is expected to be nearly $2.34 billion. The company expects comparable currency-neutral adjusted operating EBITDA growth for 2023 to be approximately flat with the prior year.
Price Performance
In the past year, International Flavors’ shares have lost 15.2% compared with the industry’s decline of 17.8%.
Zacks Rank & Key Picks
International Flavors currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Consumer Staples sector are e.l.f. Beauty, Inc. (ELF - Free Report) , Conagra Brands, Inc. (CAG - Free Report) and Campbell Soup Company (CPB - Free Report) . ELF and CAG flaunt a Zacks Rank #1 (Strong Buy) at present, while CPB has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
e.l.f. Beauty has an average trailing four-quarter earnings surprise of 105%. The Zacks Consensus Estimate for ELF’s fiscal 2023 earnings is pegged at $1.36 per share. This indicates a 61.9% increase from the prior-year reported figure. The consensus estimate for fiscal 2023 earnings has moved 21.4% north in the past 60 days. ELF’s shares gained 148.4% in the past year.
The Zacks Consensus Estimate for Conagra Brands’ 2023 earnings per share is pegged at $2.66, suggesting an increase of 12.7% from that reported in the last year. The consensus estimate for 2023 earnings moved 9% upward in the last 60 days. CAG’s shares gained 3.1% in the past year.
Campbell Soup has an average trailing four-quarter earnings surprise of 8.7%. The Zacks Consensus Estimate for CPB’s 2023 earnings is pegged at $2.99 per share. This indicates a 4.9% increase from the prior-year reported figure. The consensus estimate for 2022 earnings has been unchanged in the past 60 days. CPB’s shares gained 17.1% in the past year.
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International Flavors & Fragrances Inc. (IFF - Free Report) reported adjusted earnings of 97 cents per share in fourth-quarter 2022, beating the Zacks Consensus Estimate of 94 cents. The bottom line declined 12% from the year-ago quarter.
Including one-time items, the company reported earnings of 1 cent per share compared with the prior-year quarter’s 35 cents.
International Flavors’ net sales came in at $2,844 million in the December quarter, down 6.2% from the year-ago quarter. The top line missed the Zacks Consensus Estimate of $2,879 million. During the quarter, currency-neutral sales were up 4%, aided by double-digit growth in Pharma Solutions, and mid-single-digit growth in Scent and Nourish segment.
Operational Highlights
During the reported quarter, International Flavors’ cost of goods sold was down 3.7% year over year to $1,975 million. Gross profit fell 11.4% to $869 million. The gross margin came in at 30.6% compared with 32.4% in the year-ago quarter.
Research and development expenses declined 13.9% year over year to $143 million. Selling and administrative expenses were down 2.2% to $440 million during the fourth quarter. Adjusted operating EBITDA came in at $441 million, down 16.6% from the prior-year quarter’s $529 million.
On a comparable basis, currency-neutral adjusted operating EBITDA decreased 5% from the prior year. Strong pricing actions and productivity gains helped offset the impact of lower volumes. Adjusted operating EBITDA margin was 15.5% compared with the year-ago quarter’s 17.5%.
Segmental Performances
Revenues in the Nourish segment dipped 3% year over year to $1,577 million during the December quarter. Adjusted operating EBITDA was $195 million, down 22.3%.
Revenues generated in the Health & Bioscience segment were $501 million compared with the year-earlier quarter’s $646 million. Adjusted operating EBITDA was $121 million in the quarter compared with $156 million in the prior-year quarter.
The Scent segment’s revenues came in at $545 million compared with the year-ago quarter’s $555 million. Adjusted operating EBITDA increased 8% to $95 million.
Revenues in Pharma Solutions were $221 million in the fourth quarter, gaining 8.3% year over year. Adjusted operating EBITDA declined 11.8% to $30 million.
Financial Position
International Flavors had cash and cash equivalents of $483 million at the end of 2022, down from $711 million witnessed at the end of 2021. Long-term debt was $10.4 billion at the fourth quarter’s end compared with $10.8 billion at 2021-end.
International Flavors utilized $345 million cash in operating activities in 2022, down from $1,443 million in the prior year.
Comparable currency-neutral adjusted operating EBITDA growth for 2023 is expected to be approximately flat with the prior year.
2022 Performance
The company reported adjusted earnings of $5.55 per share in 2022, beating the Zacks Consensus Estimate of $5.54. The bottom line declined 1% from 2021’s reported figure.
Including one-time items, the company reported a loss of $7.21 per share against the prior year’s earnings of $1.10.
International Flavors’ net sales came in at $12.44 billion in 2022, up 6.7% from a year ago. The top line missed the Zacks Consensus Estimate of $12.47 billion. During the year, currency-neutral sales were up 9%, aided by double-digit growth in the Pharma and Nourish segments.
2023 Guidance
International Flavors expect sales for fiscal 2023 to be around $12.5 billion. Comparable currency-neutral sales growth for 2023 is projected to be around 6%.
Adjusted EBITDA is expected to be nearly $2.34 billion. The company expects comparable currency-neutral adjusted operating EBITDA growth for 2023 to be approximately flat with the prior year.
Price Performance
In the past year, International Flavors’ shares have lost 15.2% compared with the industry’s decline of 17.8%.
Zacks Rank & Key Picks
International Flavors currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Consumer Staples sector are e.l.f. Beauty, Inc. (ELF - Free Report) , Conagra Brands, Inc. (CAG - Free Report) and Campbell Soup Company (CPB - Free Report) . ELF and CAG flaunt a Zacks Rank #1 (Strong Buy) at present, while CPB has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
e.l.f. Beauty has an average trailing four-quarter earnings surprise of 105%. The Zacks Consensus Estimate for ELF’s fiscal 2023 earnings is pegged at $1.36 per share. This indicates a 61.9% increase from the prior-year reported figure. The consensus estimate for fiscal 2023 earnings has moved 21.4% north in the past 60 days. ELF’s shares gained 148.4% in the past year.
The Zacks Consensus Estimate for Conagra Brands’ 2023 earnings per share is pegged at $2.66, suggesting an increase of 12.7% from that reported in the last year. The consensus estimate for 2023 earnings moved 9% upward in the last 60 days. CAG’s shares gained 3.1% in the past year.
Campbell Soup has an average trailing four-quarter earnings surprise of 8.7%. The Zacks Consensus Estimate for CPB’s 2023 earnings is pegged at $2.99 per share. This indicates a 4.9% increase from the prior-year reported figure. The consensus estimate for 2022 earnings has been unchanged in the past 60 days. CPB’s shares gained 17.1% in the past year.
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