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International Flavors (IFF) Q1 Earnings Beat, Sales Dip Y/Y
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International Flavors & Fragrances Inc. (IFF - Free Report) reported adjusted earnings of $1.13 per share in first-quarter 2024, beating the Zacks Consensus Estimate of 84 cents. The bottom line improved 30% from the year-ago quarter.
Including one-time items, the company reported earnings of 23 cents against the prior-year quarter’s loss of 4 cents.
International Flavors’ net sales were $2.9 billion in the March-end quarter, decreasing 4.2% year over year. The top line surpassed the Zacks Consensus Estimate of $2.81 billion. In the January-March quarter, currency-neutral sales grew 5% year over year.
International Flavors & Fragrances Inc. Price, Consensus and EPS Surprise
In the reported quarter, International Flavors’ cost of goods sold was down 9.1% year over year to $1.88billion. The gross profit rose 6.2% year over year to $1.02 billion. The gross margin came in at 35.3% compared with 31.8% in the year-ago quarter.
Research and development expenses increased 3.1% year over year to $166 million. The selling and administrative expenses rose 7.9% year over year to $490 million in the first quarter. The adjusted operating EBITDA came in at $578 million, up 14.9% from the prior-year quarter’s $503 million. The adjusted operating EBITDA margin was 19.9% compared with the year-ago quarter’s 16.6%.
Segmental Performances
Revenues in the Nourish segment fell 9.5% year over year to $1.5 billion in the March-end quarter. The figure beat our estimate of $1.46 billion. The adjusted operating EBITDA was $216 million, up 3.8% year over year. Our estimate for the segment’s adjusted EBITDA was $181 million.
Revenues generated in the Health & Bioscience segment were $531 million compared with the year-earlier quarter’s $513 million. Our estimate was $511 million for the same. The adjusted operating EBITDA was $159 million in the quarter compared with $131 million in the prior-year quarter. Our estimate for the segment’s adjusted EBITDA was $142 million.
The Scent segment’s revenues were $645 million compared with the year-ago quarter’s $608 million. The figure was in line with our estimate. The adjusted operating EBITDA improved 49.5% year over year to $157 million. Our model had projected an EBITDA of $101 million for the segment.
Revenues in Pharma Solutions were $227 million in the first quarter, down 10.3% year over year. The figure surpassed our estimate of $223 million. The adjusted operating EBITDA fell 22% year over year to $46 million. Our model had projected an EBITDA of $52 million for the segment.
Financial Position
International Flavors had cash, cash equivalents, and restricted cash of $739 million at the end of the first quarter, up from the $709 million witnessed at the end of 2023. The long-term debt was $9.2 billion at the first-quarter end, flat with that reported on Dec 31, 2023.
International Flavors generated $99 million of cash in operating activities in the first quarter compared with $127 million in the prior-year quarter.
2024 Guidance
International Flavors expects sales for 2024 to be at the higher end of $10.8-$11.1 billion. Volume is anticipated to be near the higher end of its earlier stated expectation of flat to up 3%. The company expects pricing to increase 1% year over year, up from the previously stated decline of 2.5%. Adjusted EBITDA is expected between $1.9 billion and $2.1 billion.
Price Performance
In the past year, IFF’s shares have lost 5.3% compared with the industry’s decline of 23.8%.
Kimberly-Clark Corporation (KMB - Free Report) posted first-quarter 2024 adjusted earnings of $2.01 per share, surpassing the Zacks Consensus Estimate of $1.61. The bottom line increased 20% year over year, courtesy of higher adjusted operating profit.
Kimberly-Clark’s sales totaled $5.1 billion, surpassing the consensus estimate of $5.08 billion. The metric inched down 1% compared with the year-ago period.
Tilray Brands, Inc. (TLRY - Free Report) reported break-even quarterly earnings per share, whereas the Zacks Consensus Estimate was pegged at a loss of 4 cents. Notably, the company reported a loss of 4 cents a year ago. It posted revenues of $188.3 million for the quarter ended February 2024, missing the consensus estimate of $200 million. The top line increased 29% year over year.
Newell Brands Inc. (NWL - Free Report) posted break-even earnings in first-quarter 2024 against earnings per share of 6 cents in the year-ago quarter. Meanwhile, the consensus mark was pegged at a loss of 7 cents per share.
Net sales declined 8.4% year over year to $1.7 billion on lower core sales, and the impacts of business exits and adverse foreign exchange. Nonetheless, the metric exceeded the consensus estimate of $1.6 billion.
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International Flavors (IFF) Q1 Earnings Beat, Sales Dip Y/Y
International Flavors & Fragrances Inc. (IFF - Free Report) reported adjusted earnings of $1.13 per share in first-quarter 2024, beating the Zacks Consensus Estimate of 84 cents. The bottom line improved 30% from the year-ago quarter.
Including one-time items, the company reported earnings of 23 cents against the prior-year quarter’s loss of 4 cents.
International Flavors’ net sales were $2.9 billion in the March-end quarter, decreasing 4.2% year over year. The top line surpassed the Zacks Consensus Estimate of $2.81 billion. In the January-March quarter, currency-neutral sales grew 5% year over year.
International Flavors & Fragrances Inc. Price, Consensus and EPS Surprise
International Flavors & Fragrances Inc. price-consensus-eps-surprise-chart | International Flavors & Fragrances Inc. Quote
Operational Highlights
In the reported quarter, International Flavors’ cost of goods sold was down 9.1% year over year to $1.88billion. The gross profit rose 6.2% year over year to $1.02 billion. The gross margin came in at 35.3% compared with 31.8% in the year-ago quarter.
Research and development expenses increased 3.1% year over year to $166 million. The selling and administrative expenses rose 7.9% year over year to $490 million in the first quarter. The adjusted operating EBITDA came in at $578 million, up 14.9% from the prior-year quarter’s $503 million. The adjusted operating EBITDA margin was 19.9% compared with the year-ago quarter’s 16.6%.
Segmental Performances
Revenues in the Nourish segment fell 9.5% year over year to $1.5 billion in the March-end quarter. The figure beat our estimate of $1.46 billion. The adjusted operating EBITDA was $216 million, up 3.8% year over year. Our estimate for the segment’s adjusted EBITDA was $181 million.
Revenues generated in the Health & Bioscience segment were $531 million compared with the year-earlier quarter’s $513 million. Our estimate was $511 million for the same. The adjusted operating EBITDA was $159 million in the quarter compared with $131 million in the prior-year quarter. Our estimate for the segment’s adjusted EBITDA was $142 million.
The Scent segment’s revenues were $645 million compared with the year-ago quarter’s $608 million. The figure was in line with our estimate. The adjusted operating EBITDA improved 49.5% year over year to $157 million. Our model had projected an EBITDA of $101 million for the segment.
Revenues in Pharma Solutions were $227 million in the first quarter, down 10.3% year over year. The figure surpassed our estimate of $223 million. The adjusted operating EBITDA fell 22% year over year to $46 million. Our model had projected an EBITDA of $52 million for the segment.
Financial Position
International Flavors had cash, cash equivalents, and restricted cash of $739 million at the end of the first quarter, up from the $709 million witnessed at the end of 2023. The long-term debt was $9.2 billion at the first-quarter end, flat with that reported on Dec 31, 2023.
International Flavors generated $99 million of cash in operating activities in the first quarter compared with $127 million in the prior-year quarter.
2024 Guidance
International Flavors expects sales for 2024 to be at the higher end of $10.8-$11.1 billion. Volume is anticipated to be near the higher end of its earlier stated expectation of flat to up 3%. The company expects pricing to increase 1% year over year, up from the previously stated decline of 2.5%. Adjusted EBITDA is expected between $1.9 billion and $2.1 billion.
Price Performance
In the past year, IFF’s shares have lost 5.3% compared with the industry’s decline of 23.8%.
Image Source: Zacks Investment Research
Zacks Rank
International Flavors currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of Peers
Kimberly-Clark Corporation (KMB - Free Report) posted first-quarter 2024 adjusted earnings of $2.01 per share, surpassing the Zacks Consensus Estimate of $1.61. The bottom line increased 20% year over year, courtesy of higher adjusted operating profit.
Kimberly-Clark’s sales totaled $5.1 billion, surpassing the consensus estimate of $5.08 billion. The metric inched down 1% compared with the year-ago period.
Tilray Brands, Inc. (TLRY - Free Report) reported break-even quarterly earnings per share, whereas the Zacks Consensus Estimate was pegged at a loss of 4 cents. Notably, the company reported a loss of 4 cents a year ago. It posted revenues of $188.3 million for the quarter ended February 2024, missing the consensus estimate of $200 million. The top line increased 29% year over year.
Newell Brands Inc. (NWL - Free Report) posted break-even earnings in first-quarter 2024 against earnings per share of 6 cents in the year-ago quarter. Meanwhile, the consensus mark was pegged at a loss of 7 cents per share.
Net sales declined 8.4% year over year to $1.7 billion on lower core sales, and the impacts of business exits and adverse foreign exchange. Nonetheless, the metric exceeded the consensus estimate of $1.6 billion.