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What's in Store for International Flavors' (IFF) Q3 Earnings?

Zacks Equity Research

International Flavors & Fragrances Inc. IFF is scheduled to report third-quarter 2019 results after the closing bell on Nov 4.

Which Way are the Estimates Headed?

The Zacks Consensus Estimate for International Flavors’ third-quarter revenues is currently pegged at $1.28 billion, indicating a 41.8% jump from the year-ago quarter. The Zacks Consensus Estimate for earnings per share is pegged at $1.54, which is also in line with the year-ago quarter's reported figure.

Let’s see how things are shaping up prior to this announcement.

Factors Setting the Tone

The company has been benefiting from favorable markets for flavors and fragrances. Further, new business wins and the Frutarom acquisition are expected to have aided the company’s performance during the period under consideration.

International Flavors’ focus on driving efficiency through its cost and productivity initiatives, margin improvements, acquisition-related synergies and favorable taxes are anticipated to have boosted overall profitability during the September-end quarter. However, raw-material cost inflation and higher operating expenses might have dragged down the company’s margins during the period.

Additionally, higher interest expenses resulting from high-debt level and unfavorable foreign-currency translation impact are likely to have dented the to-be-reported quarter’s results and profitability. Nevertheless, the Frutarom acquisition is likely to have delivered cost synergy during the third quarter.

The Flavors segment’s Zacks Consensus Estimate for revenues is pegged at $429 million for the third quarter. This projection indicates a decline of 1.6% from the prior-year quarter’s $436 million. It is anticipated to report an operating profit of $93 million in the third quarter, suggesting a year-over-year decline of 4.1%.

The Zacks Consensus Estimate for the Fragrances segment’s revenues is pegged at $486 million for the July-September quarter, projecting 3.2% growth from the $471 million recorded in the year-earlier period. The segment’s operating profit is pinned at $87 million, unchanged from the prior-year quarter's reported tally. Further, elevated pricing in the segment is likely to have thwarted margins in the July-September quarter.

International Flavors & Fragrances Inc. Price and EPS Surprise

International Flavors & Fragrances Inc. Price and EPS Surprise

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

Earnings Whispers

Our proven model doesn’t conclusively predict an earnings beat for International Flavors this season. 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. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for International Flavors is -0.44%. This is because currently the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.53 per share and $1.54, respectively.

Zacks Rank: International Flavors currently carries a Zacks Rank of 3.

Price Performance

Over the past year, the company’s shares have depreciated 15.5% compared with the industry’s loss of 13%.



Stocks to Consider

Here are a few Consumer Staples stocks which you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:

e.l.f. Beauty, Inc. ELF has an Earnings ESP of +10.71% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Grocery Outlet Holding Corp. GO has an Earnings ESP of +2.70% and carries a Zacks Rank of 2, at present.

Hostess Brands, Inc. TWNK has an Earnings ESP of +5.41% and carries a Zacks Rank #3, currently.

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