International Flavors (IFF) to Post Q4 Earnings: What's in Store?
International Flavors & Fragrances Inc. IFF is scheduled to report fourth-quarter 2023 results on Feb 20, after the closing bell.
Q3 Performance
In the last reported quarter, International Flavors’ earnings and revenues declined on a year-over-year basis. The company, however, beat the Zacks Consensus Estimate for the top and bottom lines.
The company has surpassed earnings estimates in two of the trailing four quarters and missed in the other two, the average surprise being a negative 0.94%.
Q4 Estimates
The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $2.72 billion, indicating a decline of 4.5% from the year-ago reported figure. The consensus estimate for earnings for the December-end quarter is pegged at 75 cents per share, suggesting a year-over-year decline of 22.7%.
International Flavors & Fragrances Inc. Price and EPS Surprise
International Flavors & Fragrances Inc. price-eps-surprise | International Flavors & Fragrances Inc. Quote
Key Factors to Note
International Flavors has been bearing the brunt of low consumer spending and customer destocking for the past few quarters. These conditions are anticipated to have continued and impacted the company’s performance in the to-be-reported quarter.
High raw material, energy and labor costs are likely to have impacted the company’s margins in the fourth quarter. Labor shortages and supply-chain disruptions are expected to have impacted the company’s production in the to-be-reported quarter. Despite its pricing actions and cost-reduction efforts, these factors are likely to have weighed on the margins in the quarter under review.
Segmental Estimates
The company reported a decline in overall volumes in mid-single digits in the third quarter of 2023. The major part of the volume decline was due to the Functional Ingredients business, which falls under the Nourish segment. Even though the company had earlier anticipated volumes to pick up in the later part of the year, this did not materialize. This weakness in the Functional Ingredients business is expected to have been a drag on the company’s overall volumes in the fourth quarter.
Our model estimates the Nourish segment’s fourth-quarter sales to be down 13% year over year to $1.37 billion. The projection for the segment’s operating EBITDA is pegged at $161.5 million, indicating a fall of 17.5% from the year-ago quarter’s actual.
We expect the Scent segment’s sales to increase 3% year over year to $563 million. This growth is likely to have been driven by the ongoing momentum in Consumer Fragrance as well as improvement in Fine Fragrance. Our estimate for the segment’s quarterly operating EBITDA is $103 million, suggesting year-over-year growth of 8%.
The projection for the Health & Biosciences segment’s sales for the fourth quarter is pegged at $511 million, indicating a 2% increase from the year-ago quarter’s reported figure. We expect operating EBITDA to fall 4.4% to $116 million in the quarter.
The Pharma Solutions segment’s sales are projected to increase 1% year over year to $223 million. The segment's operating EBITDA is expected to rise 12% to $33.7 million from the year-ago quarter’s reported number.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for International Flavors this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that is not the case here, as you see below.
Earnings ESP: The Earnings ESP for International Flavors is 0.00%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: International Flavors currently carries a Zacks Rank of 3.
Price Performance
In the past year, IFF shares have lost 15.6% compared with the industry’s 27.4% decline.
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Stocks to Consider
Here are some companies, which according to our model, have the right combination of elements to beat on earnings this reporting cycle.
Inter Parfums IPAR currently has an Earnings ESP of +5.71% and a Zacks Rank of 2. The company is likely to have registered a top-line increase in its fourth-quarter 2023 numbers. The Zacks Consensus Estimate for Inter Parfums’ quarterly revenues is pegged at $329.1 million, indicating a rise of 5.9% from the year-ago quarter's reported number. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Inter Parfums’ quarterly earnings of 35 cents per share indicates a decline of 50.7% year over year. IPAR has a trailing four-quarter average earnings surprise of 45.7%.
Planet Fitness PLNT has an Earnings ESP of +3.77% and a Zacks Rank of 3 at present. PLNT is likely to have registered top and bottom-line growth in its fourth-quarter 2023 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $283.6 million, suggesting 0.8% growth from the figure reported in the year-ago quarter.
The consensus estimate for Planet Fitness’ fourth-quarter earnings is pegged at 58 cents per share, suggesting 9.4% growth from the year-ago quarter. The consensus mark has moved up by a penny in the past 30 days.
Monster Beverage MNST currently has an Earnings ESP of +1.65% and a Zacks Rank of 3. MNST is likely to have registered top and bottom-line growth in its fourth-quarter 2023 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.8 billion, implying growth of 15.9% from the year-ago quarter's reported number.
The consensus estimate for Monster Beverage’s quarterly earnings has been unchanged in the past 30 days at 39 cents per share, indicating growth of 34.5% from the year-ago quarter’s reported number. MNST has a trailing four-quarter average earnings surprise of 1.9%.
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International Flavors & Fragrances Inc. (IFF) : Free Stock Analysis Report
Inter Parfums, Inc. (IPAR) : Free Stock Analysis Report
Monster Beverage Corporation (MNST) : Free Stock Analysis Report
Planet Fitness, Inc. (PLNT) : Free Stock Analysis Report
