What's in Store for International Flavors' (IFF) Q3 Earnings?
International Flavors & Fragrances Inc. IFF is scheduled to report third-quarter 2020 results after the closing bell on Nov 9.
Which Way are the Estimates Headed?
The Zacks Consensus Estimate for third-quarter 2020 revenues is currently pegged at $1,278 million, indicating growth of 0.8% from the year-ago quarter. The Zacks Consensus Estimate for third-quarter earnings per share is pegged at $1.45, suggesting a year-over-year decline of 5.2%.
Key Factors
The company has witnessed a slowdown in demand in two categories — Fine Fragrance and Food Service — due to the coronavirus pandemic. These declines are primarily a result of the travel and shelter-in-place restrictions as well as the closure of retail outlets. Together, these categories generate around 15% of the company’s revenues. Fine fragrances and food services might have been thwarted by the prevalent market pressure during the September-end quarter.
Nevertheless, International Flavors has been benefiting from favorable markets for flavors and fragrances, supported by demand for a variety of consumer products and growth in emerging markets. Further, new business wins and the Frutarom acquisition are anticipated to have aided the company’s performance during the period under consideration.
International Flavors is anticipated to have benefited from significant demand for packaged food, beverage and personal care and hygiene products amid the pandemic during the September-end quarter. Moreover, focus on driving efficiency through its cost and productivity initiatives, margin improvements as well as acquisition-related synergies and favorable taxes are likely to have boosted overall profitability during the quarter under review.
The Zacks Consensus Estimate for the Taste segment’s quarterly revenues is pegged at $807 million, indicating whopping growth of 90.7% from the prior-year quarter’s $423 million. It is anticipated to report an operating profit of $142 million in the third quarter, suggesting a year-over-year rise of 44.8%. The segment is poised to benefit from robust growth in health-oriented products, improved volumes, business wins and robust project pipeline.
The Zacks Consensus Estimate for the Scent segment’s revenues is pegged at $476 million, calling for a decline of 0.8% from the year-earlier quarter. The segment’s operating profit estimate is pinned at $81 million, suggesting a year-over-year fall of 2.4%.
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 does not 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 chances 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 -0.35%.
Zacks Rank: International Flavors currently carries a Zacks Rank #3 (Hold).
Price Performance
Over the past year, the company’s shares have lost 20.3% compared with the industry’s decline of 3.1%.
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:
Grocery Outlet Holding Corp. GO has an Earnings ESP of +10.76% and currently sports a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.
Tyson Foods, Inc. TSN has an Earnings ESP of +9.57% and carries a Zacks Rank of 2, at present.
Energizer Holdings, Inc. ENR, a Zacks #3 Ranked stock, has an Earnings ESP of +1.67%.
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