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International Flavors (IFF) Down 8.7% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for International Flavors (IFF - Free Report) . Shares have lost about 8.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is International Flavors due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
International Flavors Q2 Earnings & Sales Top Estimates
International Flavors reported adjusted earnings of $1.54 per share in second-quarter 2022, beating the Zacks Consensus Estimate of $1.42. The bottom line increased 2.7% from the year-ago quarter’s levels.
Including one-time items, the company reported earnings per share (EPS) of 43 cents compared with the prior-year quarter’s 11 cents.
International Flavors’ net sales came in at $3,307 million in the June-end quarter, up 7% year over year. The top line surpassed the Zacks Consensus Estimate of $3,256 million. During the April-June quarter, currency-neutral sales were up 11%, aided by double-digit growth in Nourish and Pharma Solutions.
Operational Highlights
During the reported quarter, International Flavors’ adjusted cost of goods sold was up 9% year over year to $2,170 million. Adjusted gross profit moved up 3% year over year to $1,137 million. Adjusted gross margin came in at 34% compared with 36% in the year-ago quarter.
Research and development expenses declined 4% year over year to $158 million. Adjusted selling and administrative expenses were up 3% year on year to $396 million during the second quarter. Adjusted operating EBITDA came in at $700 million, up 3% from the prior-year quarter’s $679 million. Adjusted operating EBITDA margin was 21% compared with the year-ago quarter’s 22%.
Segmental Performances
Revenues in the Nourish segment climbed 9% year over year to $1,818 million during the June-end quarter. Adjusted operating EBITDA was $365 million, up 13% year over year.
Revenues generated in the Health & Bioscience segment came in at $665 million compared with the year-earlier quarter’s $639 million. Adjusted operating EBITDA was $184 million in the quarter compared with $190 million in the prior-year quarter.
Scent segment’s revenues came in at $580 million compared with the year-ago quarter’s $5509 million. Adjusted operating EBITDA declined 21% year over year to $93 million.
Revenues in Pharma Solutions were $244 million in the second quarter, up 5% year over year. Adjusted operating EBITDA increased 21% year over year to $58 million.
Financial Position
International Flavors had cash and cash equivalents of $573 million at the end of the second quarter, down from the $715 million witnessed at the end of 2021. Long-term debt was $10.4 billion at the second quarter’s end compared with $10.8 billion at the 2021-end.
International Flavors utilized $100 million cash in operating activities in the first half of 2022 against cash generation of $698 million in the prior-year period. Capital invested in purchasing property, plant and equipment totaled $236 million in the quarter compared with $165 million in the year-ago quarter. Dividends paid summed at $402 million in the second quarter.
2022 Guidance
International Flavors reaffirms current year guidance. It continues to expect sales to be around $12.6 billion to $13 billion in 2022. Adjusted EBITDA is expected to be between $2.5 billion and $2.6 billion. The adjusted EBITDA margin is projected to grow 4-8% on a currency-neutral basis. Currency-neutral sales growth for the year is expected to be around 9% to 12%. However, foreign currency translation will likely affect sales growth by 5 percentage points (PP) and adjusted operating EBITDA growth by 6 PP.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, International Flavors has a poor Growth Score of F, a grade with the same score on the momentum front. However, 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 F. 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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International Flavors (IFF) Down 8.7% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for International Flavors (IFF - Free Report) . Shares have lost about 8.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is International Flavors due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
International Flavors Q2 Earnings & Sales Top Estimates
International Flavors reported adjusted earnings of $1.54 per share in second-quarter 2022, beating the Zacks Consensus Estimate of $1.42. The bottom line increased 2.7% from the year-ago quarter’s levels.
Including one-time items, the company reported earnings per share (EPS) of 43 cents compared with the prior-year quarter’s 11 cents.
International Flavors’ net sales came in at $3,307 million in the June-end quarter, up 7% year over year. The top line surpassed the Zacks Consensus Estimate of $3,256 million. During the April-June quarter, currency-neutral sales were up 11%, aided by double-digit growth in Nourish and Pharma Solutions.
Operational Highlights
During the reported quarter, International Flavors’ adjusted cost of goods sold was up 9% year over year to $2,170 million. Adjusted gross profit moved up 3% year over year to $1,137 million. Adjusted gross margin came in at 34% compared with 36% in the year-ago quarter.
Research and development expenses declined 4% year over year to $158 million. Adjusted selling and administrative expenses were up 3% year on year to $396 million during the second quarter. Adjusted operating EBITDA came in at $700 million, up 3% from the prior-year quarter’s $679 million. Adjusted operating EBITDA margin was 21% compared with the year-ago quarter’s 22%.
Segmental Performances
Revenues in the Nourish segment climbed 9% year over year to $1,818 million during the June-end quarter. Adjusted operating EBITDA was $365 million, up 13% year over year.
Revenues generated in the Health & Bioscience segment came in at $665 million compared with the year-earlier quarter’s $639 million. Adjusted operating EBITDA was $184 million in the quarter compared with $190 million in the prior-year quarter.
Scent segment’s revenues came in at $580 million compared with the year-ago quarter’s $5509 million. Adjusted operating EBITDA declined 21% year over year to $93 million.
Revenues in Pharma Solutions were $244 million in the second quarter, up 5% year over year. Adjusted operating EBITDA increased 21% year over year to $58 million.
Financial Position
International Flavors had cash and cash equivalents of $573 million at the end of the second quarter, down from the $715 million witnessed at the end of 2021. Long-term debt was $10.4 billion at the second quarter’s end compared with $10.8 billion at the 2021-end.
International Flavors utilized $100 million cash in operating activities in the first half of 2022 against cash generation of $698 million in the prior-year period. Capital invested in purchasing property, plant and equipment totaled $236 million in the quarter compared with $165 million in the year-ago quarter. Dividends paid summed at $402 million in the second quarter.
2022 Guidance
International Flavors reaffirms current year guidance. It continues to expect sales to be around $12.6 billion to $13 billion in 2022. Adjusted EBITDA is expected to be between $2.5 billion and $2.6 billion. The adjusted EBITDA margin is projected to grow 4-8% on a currency-neutral basis. Currency-neutral sales growth for the year is expected to be around 9% to 12%. However, foreign currency translation will likely affect sales growth by 5 percentage points (PP) and adjusted operating EBITDA growth by 6 PP.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, International Flavors has a poor Growth Score of F, a grade with the same score on the momentum front. However, 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 F. 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.