Yahoo Finance International Flavors (IFF) Q1 Earnings Miss, View Declines
International Flavors & Fragrances Inc. IFF reported adjusted earnings of 87 cents per share in first-quarter 2023, missing the Zacks Consensus Estimate of 89 cents. The bottom line declined 49% from the year-ago quarter.
Including one-time items, the company reported a loss of 4 cents against the prior-year quarter’s earnings per share (EPS) of 96 cents.
International Flavors’ net sales were $3,027 million in the March-end quarter, decreasing 6% year over year. The downside resulted from lower volumes across most segments. The top line surpassed the Zacks Consensus Estimate of $3,016 million. In the January-March quarter, currency-neutral sales grew 1% 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 0.9% year over year to $2,063 million. The gross profit fell 15.8% year over year to $964 million. The gross margin came in at 31.8% compared with 35.5% in the year-ago quarter.
Research and development expenses increased 2.5% year over year to $161 million. The selling and administrative expenses fell 1.1% year over year to $454 million in the first quarter. The adjusted operating EBITDA came in at $503 million, down 28.3% from the prior-year quarter’s $702 million. The adjusted operating EBITDA margin was 16.6% compared with the year-ago quarter’s 21.8%.
Segmental Performances
Revenues in the Nourish segment fell 4.5% year over year to $1,653 million in the March-end quarter. The adjusted operating EBITDA was $208 million, down 36.8% year over year.
Revenues generated in the Health & Bioscience segment were $513 million compared with the year-earlier quarter’s $661 million. The adjusted operating EBITDA was $131 million in the quarter compared with $192 million in the prior-year quarter.
The Scent segment’s revenues were $608 million compared with the year-ago quarter’s $585 million. The adjusted operating EBITDA declined 9.5% year over year to $105 million.
Revenues in Pharma Solutions were $253 million in the first quarter, up 1.6% year over year. The adjusted operating EBITDA fell 9.2% year over year to $59 million.
Financial Position
International Flavors had cash and cash equivalents of $617 million at the end of the first quarter, down from the $662 million witnessed at the end of first-quarter 2022. Long-term debt was $9.2 billion at the first-quarter end, down from $10.3 billion recorded as of Dec 31, 2022.
International Flavors generated $127 million in operating activities in the first quarter against a cash utilization of $4 million in the prior-year quarter. Capital invested in purchasing property, plant and equipment totaled $175 million in the quarter compared with $132 million in the year-ago quarter. Dividends paid out summed $206 million in the first quarter.
2023 Guidance
International Flavors estimates sales of $12.3 billion for 2023, down from the prior stated $12.5 billion. The updated guidance reflects the energy and raw material pass-through price adjustments and impacts of foreign exchange. Currency-neutral sales growth for the year is expected to be 5%, down from the prior stated 6%.
The adjusted EBITDA is expected to be $2.34 billion. Foreign currency translation will likely affect sales growth by 1%, and adjusted operating EBITDA growth by 3%.
Price Performance
In the past year, International Flavors’ shares have lost 18.7% compared with the industry’s decline of 16.7%.
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Zacks Rank & Key Picks
International Flavors currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Consumer Staples sector are Post Holdings, Inc. POST, e.l.f. Beauty, Inc. ELF, and Conagra Brands, Inc. CAG. POST flaunts a Zacks Rank #1 (Strong Buy) at present, and ELF and CAG have Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Post Holdings has an average trailing four-quarter earnings surprise of 46.7%. The Zacks Consensus Estimate for POST’s 2023 earnings is pegged at $3.66 per share. This indicates a 117.8% increase from the prior-year reported figure. POST’s shares have gained 12.6% in the past year.
e.l.f. Beauty has an average trailing four-quarter earnings surprise of 105%. The Zacks Consensus Estimate for ELF’s fiscal 2023 earnings is pegged at $1.43 per share. This indicates a 70.2% increase from the prior-year reported figure. The consensus estimate for fiscal 2023 earnings has moved 1% north in the past 60 days. ELF’s shares have gained 299.8% in the past year.
The Zacks Consensus Estimate for Conagra Brands’ 2023 earnings per share is pegged at $2.75, suggesting an increase of 16.5% from that reported in the last year. The consensus estimate for 2023 earnings moved 3% upward in the last 60 days. CAG’s shares have gained 4% in the past year.
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