雅虎香港財經 Why Is International Flavors (IFF) Up 2.1% Since Last Earnings Report?
A month has gone by since the last earnings report for International Flavors (IFF). Shares have added about 2.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is International Flavors due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
International Flavors Q1 Earnings Beat, Sales Dip Y/Y
International Flavors reported adjusted earnings of $1.13 per share in first-quarter 2024, beating the Zacks Consensus Estimate of 84 cents. The bottom line improved 30% from the year-ago quarter.
Including one-time items, the company reported earnings of 23 cents against the prior-year quarter’s loss of 4 cents.
International Flavors’ net sales were $2.9 billion in the March-end quarter, decreasing 4.2% year over year. The top line surpassed the Zacks Consensus Estimate of $2.81 billion. In the January-March quarter, currency-neutral sales grew 5% year over year.
Operational Highlights
In the reported quarter, International Flavors’ cost of goods sold was down 9.1% year over year to $1.88billion. The gross profit rose 6.2% year over year to $1.02 billion. The gross margin came in at 35.3% compared with 31.8% in the year-ago quarter.
Research and development expenses increased 3.1% year over year to $166 million. The selling and administrative expenses rose 7.9% year over year to $490 million in the first quarter. The adjusted operating EBITDA came in at $578 million, up 14.9% from the prior-year quarter’s $503 million. The adjusted operating EBITDA margin was 19.9% compared with the year-ago quarter’s 16.6%.
Segmental Performances
Revenues in the Nourish segment fell 9.5% year over year to $1.5 billion in the March-end quarter. The figure beat our estimate of $1.46 billion. The adjusted operating EBITDA was $216 million, up 3.8% year over year. Our estimate for the segment’s adjusted EBITDA was $181 million.
Revenues generated in the Health & Bioscience segment were $531 million compared with the year-earlier quarter’s $513 million. Our estimate was $511 million for the same. The adjusted operating EBITDA was $159 million in the quarter compared with $131 million in the prior-year quarter. Our estimate for the segment’s adjusted EBITDA was $142 million.
The Scent segment’s revenues were $645 million compared with the year-ago quarter’s $608 million. The figure was in line with our estimate. The adjusted operating EBITDA improved 49.5% year over year to $157 million. Our model had projected an EBITDA of $101 million for the segment.
Revenues in Pharma Solutions were $227 million in the first quarter, down 10.3% year over year. The figure surpassed our estimate of $223 million. The adjusted operating EBITDA fell 22% year over year to $46 million. Our model had projected an EBITDA of $52 million for the segment.
Financial Position
International Flavors had cash, cash equivalents, and restricted cash of $739 million at the end of the first quarter, up from the $709 million witnessed at the end of 2023. The long-term debt was $9.2 billion at the first-quarter end, flat with that reported on Dec 31, 2023.
International Flavors generated $99 million of cash in operating activities in the first quarter compared with $127 million in the prior-year quarter.
2024 Guidance
International Flavors expects sales for 2024 to be at the higher end of $10.8-$11.1 billion. Volume is anticipated to be near the higher end of its earlier stated expectation of flat to up 3%. The company expects pricing to increase 1% year over year, up from the previously stated decline of 2.5%. Adjusted EBITDA is expected between $1.9 billion and $2.1 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
Currently, International Flavors has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, International Flavors has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
International Flavors belongs to the Zacks Consumer Products - Staples industry. Another stock from the same industry, Kimberly-Clark (KMB), has gained 1% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
Kimberly-Clark reported revenues of $5.15 billion in the last reported quarter, representing a year-over-year change of -0.9%. EPS of $2.01 for the same period compares with $1.67 a year ago.
For the current quarter, Kimberly-Clark is expected to post earnings of $1.67 per share, indicating a change of +1.2% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.1% over the last 30 days.
Kimberly-Clark has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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