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What's in Store for International Flavors' (IFF) Q4 Earnings?

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International Flavors & Fragrances Inc. (IFF - Free Report) is scheduled to report fourth-quarter 2020 results after the closing bell on Feb 10.

Which Way are the Estimates Headed?

The Zacks Consensus Estimate for fourth-quarter 2020 revenues is currently pegged at $1.27 billion, indicating a year-over-year decline of 0.93%. The Zacks Consensus Estimate for fourth-quarter earnings per share is pinned at $1.19, suggesting a year-over-year decline of 18.5%.

Key Factors

International Flavors projects net sales for the December-end quarter at $1,270 million compared with the year-ago quarter’s $1,284 million. On a currency-neutral basis, net sales are expected to increase approximately 2%, excluding 4-percentage point impact of the additional sales week in the prior-year period. Also, management estimates to report operating profit of approximately $100 million for the fourth quarter. Adjusted operating profit for the October–December quarter is anticipated to be roughly $203 million. Costs and productivity initiatives, margin improvement, acquisition-related synergies and favorable taxes are likely to have boosted overall profitability during the quarter under review.

Moreover, International Flavors is anticipated to have benefited from significant demand for packaged food, beverage and personal care and hygiene products amid the pandemic during the December-end quarter. The company has been benefiting from favorable markets for flavors and fragrances, supported by demand for a variety of consumer products and growth in emerging markets. Further, new business wins and the Frutarom acquisition are likely to have aided the company’s performance during the period under consideration.

Nevertheless, prevalent pressure in the Fine Fragrance and Food Service categories across emerging markets on account of the pandemic might have impacted the company’s results in the December-end quarter.

The Zacks Consensus Estimate for the Taste segment’s quarterly revenues is pegged at $768 million, indicating a surge of 78.6% from the prior-year quarter’s $430 million. It is anticipated to report an operating profit of $110 million in the fourth quarter, suggesting a year-over-year jump of 39.1%. The segment is poised to benefit from robust growth in health-oriented products as well as an improvement in Natural Product Solutions and Savory Solutions.

The Zacks Consensus Estimate for the Scent segment’s revenues is pegged at $476 million, calling for a decline of 0.4% from the year-earlier quarter. The segment’s operating profit estimate is pinned at $75 million, suggesting year-over-year growth of 2.7%. This segment is benefiting from robust growth in Consumer Fragrance.

Earnings Whispers

Our proven model conclusively predicts an earnings beat for International Flavors this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for International Flavors is +0.91%.

Zacks Rank: International Flavors currently carries a Zacks Rank #3 (Hold).

Price Performance

Over the past three months, the company’s shares have gained 17% compared with the industry’s growth of 5.8%.

Stocks to Consider

Here are a few Consumer Staples stocks which you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:

Newell Brands Inc. (NWL - Free Report) has an Earnings ESP of +2.70% and currently sports a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here.

Service Corporation International (SCI - Free Report) has an Earnings ESP of +3.68% and flaunts a Zacks Rank of 1, at present.

Monster Beverage Corporation (MNST - Free Report) , a Zacks #3 Ranked stock, has an Earnings ESP of +21.81%.

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