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IFF Earnings Beat Estimates in Q3 on Taste & Scent Strength
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Key Takeaways
IFF's Q3 adjusted EPS of 83 cents beat estimates, while sales rose 3.9% y/y to $1.94B.
Taste and Scent drove growth, with sales rising 4.4% and 5.7%, respectively, y/y.
IFF raised 2026 sales guidance to $7.5-$7.6B and EBITDA guidance to $1.55-$1.60B.
International Flavors & Fragrances Inc. (IFF - Free Report) reported third-quarter 2026 adjusted earnings of 83 cents per share, beating the Zacks Consensus Estimate of 81 cents by 2.47%. The bottom line increased from the year-ago quarter's 76 cents, excluding the results from discontinued operations.
Including one-time items, the company reported a loss of 22 cents per share against earnings of 16 cents in the prior-year quarter.
In late May, International Flavors announced that it inked a deal with CVC Capital Partners to sell its Food Ingredients business. The deal is in sync with International Flavors’ portfolio transformation strategy, which is expected to solidify its focus on its innovation-driven businesses. Starting in the second quarter of 2026, the Food Ingredients disposal group is reported as discontinued operations.
International Flavors & Fragrances Inc. Price, Consensus and EPS Surprise
Net sales rose 3.9% year over year to $1.94 billion, surpassing the consensus estimate of $1.92 billion. Comparable currency-neutral sales increased 5%, driven by broad-based growth across Taste, Scent and Health & Biosciences.
In the reported quarter, IFF's cost of goods sold increased 4.4% year over year to $1.12 billion. Gross profit rose 3.3% to $825 million. The gross margin was 42.5% compared with 42.7% in the year-ago quarter.
Research and development expenses increased 4.9% year over year to $170 million. Selling and administrative expenses rose 11.2% to $387 million.
Adjusted operating EBITDA increased 4.9% year over year to $403 million. The adjusted operating EBITDA margin improved to 20.8% from 20.5% a year ago.
International Flavors' Q3 Segmental Performances
Net sales in the Taste segment increased 4.4% year over year to $687 million. The figure surpassed our estimate of $634 million. Adjusted operating EBITDA increased 4.1% to $128 million from $123 million. Our estimate for the segment’s adjusted EBITDA was $100 million. The segment's adjusted operating EBITDA margin was 18.6% compared with 18.7% a year ago.
The Health & Biosciences segment generated sales of $566 million, increasing 1.3% from $559 million in the year-ago quarter. The upside was driven by mid-single-digit growth in Food Biosciences and Grain Processing, which more than offset weakness in Health. We expected sales of $637 million. Adjusted operating EBITDA increased 1.5% to $136 million from $134 million. The segment's adjusted operating EBITDA margin remained flat at 24%. We expected operating EBITDA to increase to $120 million.
The Scent segment’s sales rose 5.7% year over year to $689 million, led by high-single-digit growth in Consumer Fragrances. We expect the Scent segment’s sales to be $634 million. Adjusted operating EBITDA increased 9.4% to $139 million from $127 million. The figure matched our estimate. The adjusted operating EBITDA margin improved to 20.2% from 19.5%.
IFF's Cash Flow & Balance Sheet Updates
International Flavors generated $820 million in cash from operating activities during the first nine months of 2026, up from $532 million in the year-ago period. The free cash flow increased to $371 million from $126 million.
IFF had cash and cash equivalents of $272 million from continuing operations at Sept. 30, 2026, compared with $347 million at the end of 2025. Long-term debt was $4.74 billion, largely unchanged from the 2025-end level.
Net debt to credit-adjusted EBITDA stood at 2.75X at the end of the third quarter.
International Flavors’ 2026 Guidance
For 2026, IFF expects sales from continuing operations between $7.5 billion and $7.6 billion, raising the lower end from $7.4 billion.
Adjusted operating EBITDA is projected between $1.55 billion and $1.60 billion compared with the previous guidance of $1.53-$1.60 billion.
The company raised its comparable currency-neutral sales growth projection to 3-4% from 2-4%. Foreign exchange is expected to benefit sales growth by 1% and adjusted operating EBITDA growth by 2%. The company anticipates softer fourth-quarter profitability, particularly in Health & Biosciences, due to higher costs and business reinvestments.
In the past year, the company’s shares have gained 50% compared with the industry’s growth of 17.5%.
Image Source: Zacks Investment Research
Performance of Other Chemical - Specialty Stocks in Q3
Linde plc (LIN - Free Report) reported third-quarter 2026 adjusted earnings of $4.59 per share, up 9% from $4.21 a year ago. The bottom line surpassed the Zacks Consensus Estimate of $4.52 by 1.55%. Linde’s sales increased 9% year over year to $9.40 billion from $8.62 billion, beating the Zacks Consensus Estimate of $9.18 billion by 2.45%.
PPG Industries, Inc. (PPG - Free Report) reported adjusted earnings of $2.25 per share in the third quarter of 2026, up 5.6% year over year. The figure topped the Zacks Consensus Estimate of $2.13 by 5.6%. PPG Industries’ sales increased 6.6% to $4.35 billion and beat the consensus mark of $4.28 billion by 1.8%.
Ecolab Inc. (ECL - Free Report) reported third-quarter 2026 adjusted earnings of $2.18 per share, up 5% year over year. The figure was in line with the Zacks Consensus Estimate. Ecolab sales rose 13% to $4.69 billion, surpassing the consensus estimate by 0.4%.
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IFF Earnings Beat Estimates in Q3 on Taste & Scent Strength
Key Takeaways
International Flavors & Fragrances Inc. (IFF - Free Report) reported third-quarter 2026 adjusted earnings of 83 cents per share, beating the Zacks Consensus Estimate of 81 cents by 2.47%. The bottom line increased from the year-ago quarter's 76 cents, excluding the results from discontinued operations.
Including one-time items, the company reported a loss of 22 cents per share against earnings of 16 cents in the prior-year quarter.
In late May, International Flavors announced that it inked a deal with CVC Capital Partners to sell its Food Ingredients business. The deal is in sync with International Flavors’ portfolio transformation strategy, which is expected to solidify its focus on its innovation-driven businesses. Starting in the second quarter of 2026, the Food Ingredients disposal group is reported as discontinued operations.
International Flavors & Fragrances Inc. Price, Consensus and EPS Surprise
International Flavors & Fragrances Inc. price-consensus-eps-surprise-chart | International Flavors & Fragrances Inc. Quote
IFF's Q3 Gross Profit Rises Y/Y, Operating Costs Increase
Net sales rose 3.9% year over year to $1.94 billion, surpassing the consensus estimate of $1.92 billion. Comparable currency-neutral sales increased 5%, driven by broad-based growth across Taste, Scent and Health & Biosciences.
In the reported quarter, IFF's cost of goods sold increased 4.4% year over year to $1.12 billion. Gross profit rose 3.3% to $825 million. The gross margin was 42.5% compared with 42.7% in the year-ago quarter.
Research and development expenses increased 4.9% year over year to $170 million. Selling and administrative expenses rose 11.2% to $387 million.
Adjusted operating EBITDA increased 4.9% year over year to $403 million. The adjusted operating EBITDA margin improved to 20.8% from 20.5% a year ago.
International Flavors' Q3 Segmental Performances
Net sales in the Taste segment increased 4.4% year over year to $687 million. The figure surpassed our estimate of $634 million. Adjusted operating EBITDA increased 4.1% to $128 million from $123 million. Our estimate for the segment’s adjusted EBITDA was $100 million. The segment's adjusted operating EBITDA margin was 18.6% compared with 18.7% a year ago.
The Health & Biosciences segment generated sales of $566 million, increasing 1.3% from $559 million in the year-ago quarter. The upside was driven by mid-single-digit growth in Food Biosciences and Grain Processing, which more than offset weakness in Health. We expected sales of $637 million. Adjusted operating EBITDA increased 1.5% to $136 million from $134 million. The segment's adjusted operating EBITDA margin remained flat at 24%. We expected operating EBITDA to increase to $120 million.
The Scent segment’s sales rose 5.7% year over year to $689 million, led by high-single-digit growth in Consumer Fragrances. We expect the Scent segment’s sales to be $634 million. Adjusted operating EBITDA increased 9.4% to $139 million from $127 million. The figure matched our estimate. The adjusted operating EBITDA margin improved to 20.2% from 19.5%.
IFF's Cash Flow & Balance Sheet Updates
International Flavors generated $820 million in cash from operating activities during the first nine months of 2026, up from $532 million in the year-ago period. The free cash flow increased to $371 million from $126 million.
IFF had cash and cash equivalents of $272 million from continuing operations at Sept. 30, 2026, compared with $347 million at the end of 2025. Long-term debt was $4.74 billion, largely unchanged from the 2025-end level.
Net debt to credit-adjusted EBITDA stood at 2.75X at the end of the third quarter.
International Flavors’ 2026 Guidance
For 2026, IFF expects sales from continuing operations between $7.5 billion and $7.6 billion, raising the lower end from $7.4 billion.
Adjusted operating EBITDA is projected between $1.55 billion and $1.60 billion compared with the previous guidance of $1.53-$1.60 billion.
The company raised its comparable currency-neutral sales growth projection to 3-4% from 2-4%. Foreign exchange is expected to benefit sales growth by 1% and adjusted operating EBITDA growth by 2%. The company anticipates softer fourth-quarter profitability, particularly in Health & Biosciences, due to higher costs and business reinvestments.
IFF’s Zacks Rank
International Flavors currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
International Flavors Stock’s Price Performance
In the past year, the company’s shares have gained 50% compared with the industry’s growth of 17.5%.
Performance of Other Chemical - Specialty Stocks in Q3
Linde plc (LIN - Free Report) reported third-quarter 2026 adjusted earnings of $4.59 per share, up 9% from $4.21 a year ago. The bottom line surpassed the Zacks Consensus Estimate of $4.52 by 1.55%. Linde’s sales increased 9% year over year to $9.40 billion from $8.62 billion, beating the Zacks Consensus Estimate of $9.18 billion by 2.45%.
PPG Industries, Inc. (PPG - Free Report) reported adjusted earnings of $2.25 per share in the third quarter of 2026, up 5.6% year over year. The figure topped the Zacks Consensus Estimate of $2.13 by 5.6%. PPG Industries’ sales increased 6.6% to $4.35 billion and beat the consensus mark of $4.28 billion by 1.8%.
Ecolab Inc. (ECL - Free Report) reported third-quarter 2026 adjusted earnings of $2.18 per share, up 5% year over year. The figure was in line with the Zacks Consensus Estimate. Ecolab sales rose 13% to $4.69 billion, surpassing the consensus estimate by 0.4%.