International Flavors & Fragrances Inc. IFF reported adjusted earnings of $1.60 per share in first-quarter 2021, beating the Zacks Consensus Estimate of $1.51. The bottom-line figure, however, edged down 1.2% from the year-ago quarter.
Including one-time items, the company reported a loss per share of 21 cents per share as against the earnings of $1.15 per share recorded in the year-ago quarter.
International Flavors’ net sales came in at $2,465 million in the March-end quarter, reflecting a year-over year-growth of 83%. This was driven by the additional sales related to the merger with DuPont’s DD Nutrition & Biosciences (N&B) business.
The top-line figure surpassed the Zacks Consensus Estimate of $2,442 million. During the March-end quarter, currency neutral sales were up 1%, aided by strong performances in Scent & Pharma Solutions.
During the January-March quarter, International Flavors’ adjusted cost of goods sold was significantly up 96% year over year to $1,529 million. Adjusted gross profit climbed 65% year over year to $936 million. Adjusted gross margin came in at 38% compared with the 42% witnessed in the year-ago quarter.
Research and development expenses flared up 66% year over year to $143 million. Adjusted selling and administrative expenses shot up 49.5% year on year to $314 million during the first quarter. Adjusted operating EBITDA came in at $569 million compared with the prior-year quarter $303 million. Operating EBITDA margin was 23.1% compared with the year-ago quarter’s 22.4%.
International Flavors & Fragrances Inc. Price, Consensus and EPS Surprise
International Flavors & Fragrances Inc. price-consensus-eps-surprise-chart | International Flavors & Fragrances Inc. Quote
Revenues in the Nourish segment jumped 69.4% year over year to $1,308 million during the March-end quarter. Adjusted operating EBITDA was $270 million, reflecting year-over-year growth of 5.8%.
Revenues generated in the Health & Bioscience segment came in at $426 million compared with the year-earlier quarter’s $34 million. Adjusted operating EBITDA declined 2.3% year over year to $128 million.
Scent segment revenues came in at $569 million compared with the year-ago quarter’s $541 million. Adjusted operating EBITDA increased 8.4% year over year to $128 million.
Revenues in the Pharma Solutions were $162 million compared with the year-ago quarter’s $152 million. Adjusted operating EBITDA was $43 million compared with the prior-year quarter’s $42 million.
International Flavors had cash and cash equivalents of $872 million at the end of first-quarter 2021, up from $433 million witnessed at the end of the prior-year quarter. Long-term debt increased to $11,330 million as of Mar 31, 2021, from $3,779 million as of Dec 31, 2020.
International Flavors generated $358 million of cash from operating activities in the first quarter compared with the $17 million recorded in the year-ago quarter. Capital invested in purchasing property, plant and equipment totaled $93 million in the reported quarter compared with the prior-year quarter’s $49 million. Dividend paid summed $82 million in the first quarter.
International Flavors estimates sales of $11.25 billion in 2021, driven by higher volumes, favorable foreign exchange, and pricing actions to mitigate escalating raw material and logistics costs. Adjusted EBITDA margin is projected at around 23%.
Over the past six months, International Flavors’ shares have gained 31.5%, outperforming the industry’s growth of 3.4%.
Zacks Rank & Key Picks
International Flavors currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the Consumer Staples sector are Coca-Cola Femsa S.A.B. de and C.V. KOF and Pilgrim's Pride Corp. PPC, each carrying a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Coca-Cola Femsa has a long-term earnings growth rate of 14.1%. The stock has gained 14.2% in the past six months.
Pilgrim's Pride Corp. has a long-term earnings growth rate of 27%. Its shares have rallied 35.6% in six months’ time.
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