International Flavors & Fragrances Inc. (IFF - Free Report) reported adjusted earnings of $1.53 per share in third-quarter 2019, missing the Zacks Consensus Estimate of $1.54. Also, the bottom-line figure declined 5.6% from the year-ago quarter’s $1.62. Growth in adjusted operating profit was more than offset by shares outstanding and higher interest expense related to the Frutarom acquisition.
Including one-time items, earnings per share in the quarter came in at $1.13 per share compared with the $1.17 recorded in the year-ago quarter.
In the reported quarter, International Flavors’ net sales were $1.27 billion, reflecting a year-over-year jump of 40%. The top-line figure, however, missed the Zacks Consensus Estimate of $1.28 billion.
Operational Highlights
In the third quarter, International Flavors’ cost of goods sold surged 45% year over year to $734.3 million. Adjusted gross profit increased 35.6% year over year to $530.6 million. Adjusted gross margin came in at 41.8% compared with the 43.1% witnessed in the year-ago quarter.
Research and development expenses flared up 13% year over year to $85 million. Adjusted selling and administrative expenses in the September-end quarter rose 37.8% year over year to $196.4 million. Adjusted operating profit increased 22.2% year over year to $201 million. Adjusted operating margin came in at 15.8% compared with the year-ago quarter’s 18.1%.
International Flavors & Fragrances Inc. Price, Consensus and EPS Surprise
Segmental Performances
Revenues in the Taste segment decreased 3%, year over year, to $423.3 million during the July-September quarter. On a constant-currency basis, revenues slipped 2% year over year. Operating profit inched up 1% year over year to $97.5 million. Despite strong business win, the segment’s performance was adversely impacted by volume erosion.
Revenues generated in the Scent segment came in at $480.4 million, up 2% year over year. On a constant-currency basis, revenues improved 3% year over year. Operating profit declined 4.5% year over year to $83.5 million.
Last October, International Flavors completed the acquisition of Frutarom Industries Ltd. The Frutarom segment’s revenues came in at $363.7 million and operating profit was $28 million during the quarter.
Financial Position
International Flavors had cash and cash equivalents of $504 million as of Sep 30, 2019, significantly down from the $5,274 million as of Sep 30, 2018.
Long-term debt fell to $4,008 million as of Sep 30, 2019, from $4,504 million as of Dec 31, 2018.
International Flavors generated $383 million of cash from operating activities during the nine-month period ended Sep 30, 2019, compared with the $202 million reported in the comparable period last year.
Capital invested in purchasing property, plant and equipment totaled $160.4 million during the nine-month period ended Sep 30, 2019. Dividend paid totaled $233.4 million during this period.
Outlook
International Flavors has reiterated its guidance for 2019. Sales are projected at $5.15-$5.25 billion. Adjusted earnings per share are expected in the band of $4.85-$5.05. Adjusted earnings excluding amortization are anticipated between $6.15 and $6.35. The company expects to achieve cost savings of $50 million this year.
The company is focused on delivering solid top- and bottom-line results by creating value for shareholders through growth acceleration, margin expansion and integration.
Share Price Performance
Over the past year, International Flavors’ shares have lost 16.6%, compared with the industry’s loss of 17.4%.
Zacks Rank & Key Picks
International Flavors currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Consumer Staples space are e.l.f. Beauty, Inc. (ELF - Free Report) , Helen of Troy Limited (HELE - Free Report) and The Procter & Gamble Company (PG - Free Report) .
e.l.f. Beauty sports a Zacks Rank #1 (Strong Buy) at present and has a long-term EPS growth rate of 3.8%. The company has appreciated 39.1% over the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Helen of Troy, with a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 6.7%. The stock has gained 15.6% over the past year.
Procter & Gamble, with a long-term earnings growth rate of 7.2%, currently carries a Zacks Rank of 2. Shares of the company have rallied 30.2% over the past year.
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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International Flavors & Fragrances Inc. (IFF - Free Report) reported adjusted earnings of $1.53 per share in third-quarter 2019, missing the Zacks Consensus Estimate of $1.54. Also, the bottom-line figure declined 5.6% from the year-ago quarter’s $1.62. Growth in adjusted operating profit was more than offset by shares outstanding and higher interest expense related to the Frutarom acquisition.
Including one-time items, earnings per share in the quarter came in at $1.13 per share compared with the $1.17 recorded in the year-ago quarter.
In the reported quarter, International Flavors’ net sales were $1.27 billion, reflecting a year-over-year jump of 40%. The top-line figure, however, missed the Zacks Consensus Estimate of $1.28 billion.
Operational Highlights
In the third quarter, International Flavors’ cost of goods sold surged 45% year over year to $734.3 million. Adjusted gross profit increased 35.6% year over year to $530.6 million. Adjusted gross margin came in at 41.8% compared with the 43.1% witnessed in the year-ago quarter.
Research and development expenses flared up 13% year over year to $85 million. Adjusted selling and administrative expenses in the September-end quarter rose 37.8% year over year to $196.4 million. Adjusted operating profit increased 22.2% year over year to $201 million. Adjusted operating margin came in at 15.8% compared with the year-ago quarter’s 18.1%.
International Flavors & Fragrances Inc. Price, Consensus and EPS Surprise
Segmental Performances
Revenues in the Taste segment decreased 3%, year over year, to $423.3 million during the July-September quarter. On a constant-currency basis, revenues slipped 2% year over year. Operating profit inched up 1% year over year to $97.5 million. Despite strong business win, the segment’s performance was adversely impacted by volume erosion.
Revenues generated in the Scent segment came in at $480.4 million, up 2% year over year. On a constant-currency basis, revenues improved 3% year over year. Operating profit declined 4.5% year over year to $83.5 million.
Last October, International Flavors completed the acquisition of Frutarom Industries Ltd. The Frutarom segment’s revenues came in at $363.7 million and operating profit was $28 million during the quarter.
Financial Position
International Flavors had cash and cash equivalents of $504 million as of Sep 30, 2019, significantly down from the $5,274 million as of Sep 30, 2018.
Long-term debt fell to $4,008 million as of Sep 30, 2019, from $4,504 million as of Dec 31, 2018.
International Flavors generated $383 million of cash from operating activities during the nine-month period ended Sep 30, 2019, compared with the $202 million reported in the comparable period last year.
Capital invested in purchasing property, plant and equipment totaled $160.4 million during the nine-month period ended Sep 30, 2019. Dividend paid totaled $233.4 million during this period.
Outlook
International Flavors has reiterated its guidance for 2019. Sales are projected at $5.15-$5.25 billion. Adjusted earnings per share are expected in the band of $4.85-$5.05. Adjusted earnings excluding amortization are anticipated between $6.15 and $6.35. The company expects to achieve cost savings of $50 million this year.
The company is focused on delivering solid top- and bottom-line results by creating value for shareholders through growth acceleration, margin expansion and integration.
Share Price Performance
Over the past year, International Flavors’ shares have lost 16.6%, compared with the industry’s loss of 17.4%.
Zacks Rank & Key Picks
International Flavors currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Consumer Staples space are e.l.f. Beauty, Inc. (ELF - Free Report) , Helen of Troy Limited (HELE - Free Report) and The Procter & Gamble Company (PG - Free Report) .
e.l.f. Beauty sports a Zacks Rank #1 (Strong Buy) at present and has a long-term EPS growth rate of 3.8%. The company has appreciated 39.1% over the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Helen of Troy, with a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 6.7%. The stock has gained 15.6% over the past year.
Procter & Gamble, with a long-term earnings growth rate of 7.2%, currently carries a Zacks Rank of 2. Shares of the company have rallied 30.2% over the past year.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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