IFF’s Q3 Adjusted Earnings Met Analysts’ Expectations

Peter Neil - Author

Nov. 6 2018, Published 9:35 a.m. ET

Third-quarter revenues

On November 5, International Flavors and Fragrances (IFF) reported its third-quarter earnings after the market closed. The company reported revenues of $907.54 million—an increase of ~4.0% YoY (year-over-year). The company reported revenues of $872.94 million in the third quarter of 2017. International Flavors and Fragrances beat analysts’ consensus revenue estimate of $895.83 million.

The company’s revenue growth was driven by higher volume growth in both of its reporting segments.

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Third-quarter adjusted EPS

International Flavors and Fragrances reported an adjusted EPS of $1.54—an increase of 4.8% YoY. In the third quarter of 2017, the company reported an adjusted EPS of $1.47. The company met analysts’ expectation of $1.54. International Flavors and Fragrances has beat analysts’ earnings estimates in the past six quarters. The adjusted EPS excludes several one-time significant items like $0.56 per share related to the Frutarom acquisition costs. The adjusted EPS excludes gains on US tax reform, the FDA’s mandated product recall, and gains on the sale of assets and others.

Outlook and stock price

With the completion of the Frutarom acquisition, International Flavors and Fragrances has given a revenue guidance range of $3.95 billion–$4.05 billion for 2018. The company expects the adjusted EPS to be $6.25–$6.45. Before the market opened on November 6, International Flavors and Fragrances was trading down ~1.6%. Sensient Technologies (SXT) and Estée Lauder (EL) were trading down by 0.6% and 0.9%, respectively, while Clorox (CLX) rose 1.8%.

Investors could consider the PowerShares S&P 500 Equal Weight Materials ETF (RTM), which invests 5.0% of its portfolio in International Flavors and Fragrances as of November 5.


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