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Why Is International Flavors (IFF) Up 4.4% Since Last Earnings Report?
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A month has gone by since the last earnings report for International Flavors (IFF - Free Report) . Shares have added about 4.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is International Flavors due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
International Flavors Q1 Earnings & Sales Top Estimates
International Flavors reported adjusted earnings of $1.60 per share in first-quarter 2021, beating the Zacks Consensus Estimate of $1.51. The bottom-line figure, however, edged down 1.2% from the year-ago quarter.
Including one-time items, the company reported a loss per share of 21 cents per share as against the earnings of $1.15 per share recorded in the year-ago quarter.
International Flavors’ net sales came in at $2,465 million in the March-end quarter, reflecting a year-over year-growth of 83%. This was driven by the additional sales related to the merger with DuPont’s Nutrition & Biosciences (N&B) business.
The top-line figure surpassed the Zacks Consensus Estimate of $2,442 million. During the March-end quarter, currency neutral sales were up 1%, aided by strong performances in Scent & Pharma Solutions.
Operational Highlights
During the January-March quarter, International Flavors’ adjusted cost of goods sold was significantly up 96% year over year to $1,529 million. Adjusted gross profit climbed 65% year over year to $936 million. Adjusted gross margin came in at 38% compared with the 42% witnessed in the year-ago quarter.
Research and development expenses flared up 66% year over year to $143 million. Adjusted selling and administrative expenses shot up 49.5% year on year to $314 million during the first quarter. Adjusted operating EBITDA came in at $569 million compared with the prior-year quarter $303 million. Operating EBITDA margin was 23.1% compared with the year-ago quarter’s 22.4%.
Segmental Performances
Revenues in the Nourish segment jumped 69.4% year over year to $1,308 million during the March-end quarter. Adjusted operating EBITDA was $270 million, reflecting year-over-year growth of 5.8%.
Revenues generated in the Health & Bioscience segment came in at $426 million compared with the year-earlier quarter’s $34 million. Adjusted operating EBITDA declined 2.3% year over year to $128 million.
Scent segment revenues came in at $569 million compared with the year-ago quarter’s $541 million. Adjusted operating EBITDA increased 8.4% year over year to $128 million.
Revenues in the Pharma Solutions were $162 million compared with the year-ago quarter’s $152 million. Adjusted operating EBITDA was $43 million compared with the prior-year quarter’s $42 million.
Financial Position
International Flavors had cash and cash equivalents of $872 million at the end of first-quarter 2021, up from $433 million witnessed at the end of the prior-year quarter. Long-term debt increased to $11,330 million as of Mar 31, 2021, from $3,779 million as of Dec 31, 2020.
International Flavors generated $358 million of cash from operating activities in the first quarter compared with the $17 million recorded in the year-ago quarter. Capital invested in purchasing property, plant and equipment totaled $93 million in the reported quarter compared with the prior-year quarter’s $49 million. Dividend paid summed $82 million in the first quarter.
2021 Guidance
International Flavors estimates sales of $11.25 billion in 2021, driven by higher volumes, favorable foreign exchange, and pricing actions to mitigate escalating raw material and logistics costs. Adjusted EBITDA margin is projected at around 23%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, International Flavors has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, 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 these revisions 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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Why Is International Flavors (IFF) Up 4.4% Since Last Earnings Report?
A month has gone by since the last earnings report for International Flavors (IFF - Free Report) . Shares have added about 4.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is International Flavors due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
International Flavors Q1 Earnings & Sales Top Estimates
International Flavors reported adjusted earnings of $1.60 per share in first-quarter 2021, beating the Zacks Consensus Estimate of $1.51. The bottom-line figure, however, edged down 1.2% from the year-ago quarter.
Including one-time items, the company reported a loss per share of 21 cents per share as against the earnings of $1.15 per share recorded in the year-ago quarter.
International Flavors’ net sales came in at $2,465 million in the March-end quarter, reflecting a year-over year-growth of 83%. This was driven by the additional sales related to the merger with DuPont’s Nutrition & Biosciences (N&B) business.
The top-line figure surpassed the Zacks Consensus Estimate of $2,442 million. During the March-end quarter, currency neutral sales were up 1%, aided by strong performances in Scent & Pharma Solutions.
Operational Highlights
During the January-March quarter, International Flavors’ adjusted cost of goods sold was significantly up 96% year over year to $1,529 million. Adjusted gross profit climbed 65% year over year to $936 million. Adjusted gross margin came in at 38% compared with the 42% witnessed in the year-ago quarter.
Research and development expenses flared up 66% year over year to $143 million. Adjusted selling and administrative expenses shot up 49.5% year on year to $314 million during the first quarter. Adjusted operating EBITDA came in at $569 million compared with the prior-year quarter $303 million. Operating EBITDA margin was 23.1% compared with the year-ago quarter’s 22.4%.
Segmental Performances
Revenues in the Nourish segment jumped 69.4% year over year to $1,308 million during the March-end quarter. Adjusted operating EBITDA was $270 million, reflecting year-over-year growth of 5.8%.
Revenues generated in the Health & Bioscience segment came in at $426 million compared with the year-earlier quarter’s $34 million. Adjusted operating EBITDA declined 2.3% year over year to $128 million.
Scent segment revenues came in at $569 million compared with the year-ago quarter’s $541 million. Adjusted operating EBITDA increased 8.4% year over year to $128 million.
Revenues in the Pharma Solutions were $162 million compared with the year-ago quarter’s $152 million. Adjusted operating EBITDA was $43 million compared with the prior-year quarter’s $42 million.
Financial Position
International Flavors had cash and cash equivalents of $872 million at the end of first-quarter 2021, up from $433 million witnessed at the end of the prior-year quarter. Long-term debt increased to $11,330 million as of Mar 31, 2021, from $3,779 million as of Dec 31, 2020.
International Flavors generated $358 million of cash from operating activities in the first quarter compared with the $17 million recorded in the year-ago quarter. Capital invested in purchasing property, plant and equipment totaled $93 million in the reported quarter compared with the prior-year quarter’s $49 million. Dividend paid summed $82 million in the first quarter.
2021 Guidance
International Flavors estimates sales of $11.25 billion in 2021, driven by higher volumes, favorable foreign exchange, and pricing actions to mitigate escalating raw material and logistics costs. Adjusted EBITDA margin is projected at around 23%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, International Flavors has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, 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 these revisions 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.