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IFF’s Revenue Broke $800 Million in 1Q17, Missed Estimates

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1Q17 revenue

International Flavors & Fragrances (IFF) reported revenue of $828.3 million in 1Q17. For the first time, it broke the jinx of $800 million in revenue during a quarter. Reported revenue rose 6%—compared to $783.3 million in 1Q16. However, International Flavors & Fragrances didn’t meet analysts’ expectation of $831.80 million.

International Flavors & Fragrances’ revenue grew primarily due to revenue from its acquisition of David Michael and Fragrance Resources. The foreign exchange hedge had a negative impact on sales. During the quarter, the sweetness and savory modulation portfolio had double-digit growth. International Flavors & Fragrances launched and commercialized two new flavor molecules. Revenue rose for both of the company’s reporting segments. We’ll look at each of the reporting segments later in this series.

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CEO’s remarks and fiscal guidance

Andreas Fibig, International Flavors & Fragrances’ chairman and CEO, said, “Sales performance was broad-based, driven by the contribution of our recent acquisitions and a strong performance in Flavors, where we achieved growth across all categories and regions.”

International Flavor & Fragrances expects fiscal revenue to rise 7.5%–8.5% compared to the previous year—excluding currency impact. Including currency impact, revenue growth is projected to be 6.0%– 7.0% compared to the previous year.

Investors can indirectly hold International Flavors & Fragrances by investing in the Vanguard Materials ETF (VAW). VAW has invested 1.20% of its holdings in International Flavors & Fragrances as of May 8, 2017. The fund’s top holdings include Dow Chemical (DOW), DuPont (DD), and Monsanto (MON) with weights of 8.4%, 8.4%, and 6.1%, respectively.

In the next part, we’ll look at how the Fragrance Business segment performed in 1Q17.

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