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What's in Store for International Flavors' (IFF) Q1 Earnings?

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International Flavors & Fragrances Inc. (IFF - Free Report) is scheduled to report first-quarter 2022 results on May 9 after the closing bell.

Q4 Performance

In the last reported quarter, International Flavors’ earnings and revenues beat the Zacks Consensus Estimates. While the bottom-line figure declined, the top line increased on a year-over-year basis.

The company has surpassed earnings estimates in three of the trailing four quarters and missed once, the average surprise being 4.2%.

Q1 Estimates

The Zacks Consensus Estimate for first-quarter revenues is currently pegged at $3.18 billion, indicating year-over-year growth of 29%. The Zacks Consensus Estimate for the December-end quarter earnings per share is pegged at $1.31, suggesting a year-over-year decline of 18.1%.

Key Factors to Note

International Flavors has been gaining from favorable markets for flavors and fragrances, supported by demand for a variety of consumer products and growth in emerging markets. New business wins and the synergies from the Frutarom acquisition are likely to have aided the company’s performance in the quarter to be reported.

The Nourish segment continues to deliver strong results, primarily driven by the Flavors unit and Ingredients. The segment has been gaining on the rebound in Food Design and improved demand in Food Service. The Zacks Consensus Estimate for the segment’s sales for the first quarter is pegged at $1,718 million. The consensus mark for the segment’s operating EBITDA is pegged at $310 million.

The Scent segment has been witnessing sustained strength in Cosmetic Actives and Consumer Fragrances. Volumes have picked up in the Fine Fragrance business, with consumer behavior returning to normal levels. These are likely to get reflected in the segment’s first-quarter top line. The Zacks Consensus Estimate for the segment’s sales for the first quarter is currently pegged at $604 million. The estimate for operating EBITDA for the segment is at $113 million.

Evolving consumer buying trends are driving demand for the Home & Personal Care business, which might get reflected in the Health & Biosciences segment’s quarterly results. Growth in Grain Processing and Cultures & Food Enzymes are expected to have contributed to the segment’s performance. The Zacks Consensus Estimate for the segment’s sales for the first quarter is pegged at $649 million. The estimate for the segment’s operating EBITDA is pegged at $172 million.

Strong growth in Industrial Pharma is expected to have supported the Pharma Solutions segment during the to-be-reported quarter. The Zacks Consensus Estimate for the segment’s first-quarter sales is pegged at $232 million. The estimate for the segment’s operating EBITDA stands at $52 million.

High raw material, energy and labor costs are likely to have impacted the company’s margins in the first quarter. Manufacturing expenses are anticipated to have been higher as a result of the company’s efforts to meet the current high demand levels. Labor shortage and supply-chain disruptions might have impacted the company’s production in the to-be-reported quarter. Despite its pricing actions and cost reduction efforts, these factors are likely to have weighed on the company’s margins in the first quarter.

 

Earnings Whispers

Our proven model doesn’t conclusively predict 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. But that’s not the case here.

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 +3.05%.

Zacks Rank: International Flavors currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today's Zacks #1 Rank stocks here.

Price Performance

In the past year, the company’s shares have declined 13.6% compared with the industry’s loss of 30%.

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Stocks to Consider

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

Olaplex Holdings, Inc. (OLPX - Free Report) has an Earnings ESP of +6.93% and a Zacks Rank #2. The Zacks Consensus Estimate for the company’s first-quarter 2022 revenues is pegged at $172 million.

The Zacks Consensus Estimate for the company’s first-quarter earnings currently stands at 11 cents. OLPX has a trailing four-quarter earnings surprise of 11.1%, on average.

US Foods Holding Corp. (USFD - Free Report) currently has an Earnings ESP of +19.32% and a Zacks Rank of 3. The Zacks Consensus Estimate for USFD’s quarterly revenues stands at $7.8 billion, suggesting year-over-year growth of 23.9%.

The Zacks Consensus Estimate for US Foods’ first-quarter 2022 earnings is pegged at 29 cents per share, suggesting 142% growth from the year-ago quarter’s levels. USFD has a trailing four-quarter earnings surprise of 33.6%, on average.

Celsius Holdings, Inc. (CELH - Free Report) currently has an Earnings ESP of +12.50% and a Zacks Rank of 3. The Zacks Consensus Estimate for CELH’s quarterly revenues is pegged at $118 million, which indicates an increase of 135% from the prior-year quarter’s figure.

The Zacks Consensus Estimate for Celsius Holdings’ first-quarter 2022 earnings is pegged at 3 cents per share. The estimate projects year-over-year growth of 200%. CELH has a trailing four-quarter earnings surprise of 156.3%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.