Yahoo Finance International Flavors (IFF) Q3 Earnings & Sales Top Estimates
International Flavors & Fragrances Inc. IFF reported adjusted earnings of $1.36 per share in third-quarter 2022, beating the Zacks Consensus Estimate of $1.30. The bottom line declined 7% from the year-ago quarter.
Including one-time items, the company reported a loss per share of $8.60 compared with the prior-year quarter’s earnings per share of 76 cents.
International Flavors’ net sales came in at $3,063 million in the September-end quarter, flat year over year. The top line surpassed the Zacks Consensus Estimate of $3,026 million. During the quarter, currency-neutral sales were up 10%, aided by double-digit growth in Nourish and Pharma Solutions.
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
During the reported quarter, International Flavors’ adjusted cost of goods sold was up 4% year over year to $2,062 million. Adjusted gross profit moved down 7% year over year to $1,001 million. The adjusted gross margin came in at 32.7% compared with 35.2% in the year-ago quarter.
Research and development expenses declined 7% year over year to $145 million. Adjusted selling and administrative expenses were down 6% year on year to $355 million during the third quarter. Adjusted operating EBITDA came in at $612 million, down 6% from the prior-year quarter’s $648 million.
On a comparable basis, currency-neutral adjusted operating EBITDA grew 3% from the prior year as strong pricing actions and productivity gains helped offset the impact of lower volumes. Adjusted operating EBITDA margin was 20% compared with the year-ago quarter’s 21%.
Segmental Performances
Revenues in the Nourish segment climbed 3% year over year to $1.703 million during the September-end quarter. Adjusted operating EBITDA was $287 million, down 12% year over year.
Revenues generated in the Health & Bioscience segment were $495 million compared with the year-earlier quarter’s $510 million. Adjusted operating EBITDA was $139 million in the quarter compared with $149 million in the prior-year quarter.
The scent segment’s revenues came in at $591 million compared with the year-ago quarter’s $580 million. Adjusted operating EBITDA declined 8% year over year to $119 million.
Revenues in Pharma Solutions were $257 million in the third quarter, gaining 22% year over year. Adjusted operating EBITDA soared 73% year over year to $69 million.
Financial Position
International Flavors had cash and cash equivalents of $538 million at the end of the third quarter, down from the $711 million witnessed at the end of 2021. Long-term debt was $10.3 billion at the third quarter’s end compared with $10.8 billion at 2021-end.
International Flavors utilized $189 million cash in operating activities in the first nine month period of 2022, down from the figure of $1,126 million in the prior-year period.
2022 Guidance
International Flavors now expect sales in fiscal 2022 to be between $12.4 billion and $12.5 billion, lower than the earlier projected range of $12.6 billion to $13 billion. This revision was mainly due to account for an unfavorable impact from foreign exchange and a more challenging operating environment. Foreign currency translation will likely affect sales growth by 5 percentage points (PP) and adjusted operating EBITDA growth by 6 PP.
Adjusted EBITDA is expected to come in near the low end of the previously stated range of $2.5 billion to $2.6 billion. The adjusted EBITDA margin is projected to grow at the low end of the band of 4-8% on a currency-neutral basis. Currency-neutral sales growth for the year is expected to be around 9 to 10%, down from 9 to 12% expected earlier.
Price Performance
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In the past year, International Flavors’ shares have lost 37.1% compared with the industry’s decline of 42.3%.
Zacks Rank & Key Picks
International Flavors currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Consumer Staples sector are TreeHouse Foods THS, Lamb Weston LW and Medifast MED.
TreeHouse Foods, which manufactures and distributes private-label foods and beverages, sports a Zacks Rank #1 (Strong Buy) at present. TreeHouse Foods has a trailing four-quarter earnings surprise of 45.2%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for THS’ current financial-year sales and EPS suggests growth of 16.8% and 15.1%, respectively, from the year-ago reported numbers.
Lamb Weston, a frozen potato product company, currently sports a Zacks Rank #1. LW has a trailing four-quarter earnings surprise of 47.3%, on average.
The Zacks Consensus Estimate for Lamb Weston’s current financial-year sales and earnings suggests growth of 14.6% and 45.7%, respectively, from the year-ago reported numbers.
Medifast, which manufactures and distributes weight loss, weight management, healthy living products and other consumable health and nutritional products, currently carries a Zacks Rank #2 (Buy). MED has a trailing four-quarter earnings surprise of 12.4%, on average.
The Zacks Consensus Estimate for Medifast’s current financial year sales EPS suggests a decline of 8.3% from the year-ago reported figures.
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International Flavors & Fragrances Inc. (IFF) : Free Stock Analysis Report
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