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International Flavors (IFF) Q2 Earnings & Sales Top Estimates

International Flavors & Fragrances Inc. IFF reported adjusted earnings of $1.54 per share in second-quarter 2022, beating the Zacks Consensus Estimate of $1.42. The bottom line increased 2.7% from the year-ago quarter’s levels.

Including one-time items, the company reported earnings per share (EPS) of 43 cents compared with the prior-year quarter’s 11 cents.

International Flavors’ net sales came in at $3,307 million in the June-end quarter, up 7% year over year. The top line surpassed the Zacks Consensus Estimate of $3,256 million. During the April-June quarter, currency-neutral sales were up 11%, aided by double-digit growth in Nourish and Pharma Solutions.

Operational Highlights

During the reported quarter, International Flavors’ adjusted cost of goods sold was up 9% year over year to $2,170 million. Adjusted gross profit moved up 3% year over year to $1,137 million. Adjusted gross margin came in at 34% compared with 36% in the year-ago quarter.

Research and development expenses declined 4% year over year to $158 million. Adjusted selling and administrative expenses were up 3% year on year to $396 million during the second quarter. Adjusted operating EBITDA came in at $700 million, up 3% from the prior-year quarter’s $679 million. Adjusted operating EBITDA margin was 21% compared with the year-ago quarter’s 22%.

International Flavors & Fragrances Inc. Price, Consensus and EPS Surprise

 

International Flavors & Fragrances Inc. Price, Consensus and EPS Surprise
International Flavors & Fragrances Inc. Price, Consensus and EPS Surprise

International Flavors & Fragrances Inc. price-consensus-eps-surprise-chart | International Flavors & Fragrances Inc. Quote

 

Segmental Performances

Revenues in the Nourish segment climbed 9% year over year to $1,818 million during the June-end quarter. Adjusted operating EBITDA was $365 million, up 13% year over year.

Revenues generated in the Health & Bioscience segment came in at $665 million compared with the year-earlier quarter’s $639 million. Adjusted operating EBITDA was $184 million in the quarter compared with $190 million in the prior-year quarter.

Scent segment’s revenues came in at $580 million compared with the year-ago quarter’s $5509 million. Adjusted operating EBITDA declined 21% year over year to $93 million.

Revenues in Pharma Solutions were $244 million in the second quarter, up 5% year over year. Adjusted operating EBITDA increased 21% year over year to $58 million.

Financial Position

International Flavors had cash and cash equivalents of $573 million at the end of the second quarter, down from the $715 million witnessed at the end of 2021. Long-term debt was $10.4 billion at the second quarter’s end compared with $10.8 billion at the 2021-end.

International Flavors utilized $100 million cash in operating activities in the first half of 2022 against cash generation of $698 million in the prior-year period. Capital invested in purchasing property, plant and equipment totaled $236 million in the quarter compared with $165 million in the year-ago quarter. Dividends paid summed at $402 million in the second quarter.

2022 Guidance

International Flavors reaffirms current year guidance. It continues to expect sales to be around $12.6 billion to $13 billion in 2022. Adjusted EBITDA is expected to be between $2.5 billion and $2.6 billion. The adjusted EBITDA margin is projected to grow 4-8% on a currency-neutral basis. Currency-neutral sales growth for the year is expected to be around 9% to 12%.

However, foreign currency translation will likely affect sales growth by 5 percentage points (PP) and adjusted operating EBITDA growth by 6 PP.

Price Performance

In the past year, International Flavors’ shares have lost 18.4% compared with the industry’s decline of 32%.

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Zacks Rank & Key Picks

International Flavors currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the Consumer Staples sector include The Chef's Warehouse CHEF, United Natural Foods UNFI and General Mills, Inc. GIS. While CHEF sports a Zacks Rank #1 (Strong Buy), UNFI & GIS carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Chef's Warehouse has an estimated earnings growth rate of 2,820% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 74%.

Chef's Warehouse pulled off a trailing four-quarter earnings surprise of 355.8%, on average. CHEF’s shares have risen 14.7% in the past year.

United Natural Foods pulled off a trailing four-quarter earnings surprise of 29.9%, on average. UNFI’s shares have risen 30.9% in the past year.

The Zacks Consensus Estimate for United Natural Foods’ current financial year sales suggests 7.6% growth from the year-ago period’s reported figures.

General Mills has an estimated earnings growth rate of 1.52% for fiscal 2023. In the past 60 days, the Zacks Consensus Estimate for fiscal 2023 earnings has been revised upward by 9%.

General Mills pulled off a trailing four-quarter earnings surprise of 6.5%, on average. GIS’s shares have risen 30.6% in the past year.


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