What's in Store for International Flavors' (IFF) Q3 Earnings?
International Flavors & Fragrances Inc. IFF is scheduled to report third-quarter 2023 results on Nov 6, after the closing bell.
Q2 Performance
In the last reported quarter, International Flavors’ earnings and revenues missed estimates. On a year-over-year basis, earnings and revenues declined. 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 4.1%.
International Flavors & Fragrances Inc. Price and EPS Surprise
International Flavors & Fragrances Inc. price-eps-surprise | International Flavors & Fragrances Inc. Quote
Q3 Estimates
The Zacks Consensus Estimate for third-quarter revenues is pegged at $2.76 billion, indicating a decline of 9.7% from the year-ago reported figure. The Zacks Consensus Estimate for the September-end quarter’s earnings per share is pegged at 76 cents, suggesting a year-over-year decline of 44.1%.
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.
The headwinds are expected to have been partially offset by the company's ongoing efforts to improve productivity and reduce costs. IFF has been focusing on accelerating growth through organic investments and strategic acquisitions, while also returning capital to shareholders. This is also likely to have favored the margins in the quarter.
High raw material, energy and labor costs are likely to have impacted the company’s margins in the third quarter. Manufacturing expenses are anticipated to have been higher due to IFF’s efforts to meet the current high demand levels.
Labor shortages and supply-chain disruptions are likely 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 company’s margins in the quarter under review.
Segmental Estimates
Our model estimates the Nourish segment’s third-quarter sales to be down 18.1% year over year to $1,395 million. The projection for the segment’s operating EBITDA is pegged at $184 million, indicating a fall of 35.9% from the prior-year quarter’s actual.
We expect the Scent segment sales to increase 5.4% year over year to $623 million. Our estimate for the segment’s quarterly operating EBITDA is $93 million, suggesting a year-over-year fall of 22%.
The projection for the Health & Biosciences segment’s sales for the third quarter is pegged at $471 million, indicating a fall of 8.1% from the prior-year quarter’s reported figure. We expect operating EBITDA to fall 16.7% to $114 million in the September-end quarter.
The Pharma Solutions segment’s sales are projected to increase 7.3% year over year to $276 million. The segment's operating EBITDA is expected to fall 31.9% to $47 million from the prior-year quarter’s reported number.
Earnings Whispers
Our model predicts 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 chances of an earnings beat. That is precisely the case here.
You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for International Flavors is +7.43%.
Zacks Rank: International Flavors currently carries a Zacks Rank #3.
Price Performance
In the past year, IFF shares have lost 24.6% compared with the industry’s fall of 22.9%.
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Other Stocks to Consider
Here are some other Consumer Staples stocks, which, according to our model, also have the right combination of elements to post an earnings beat in their upcoming releases:
TreeHouse Foods, Inc. THS, scheduled to release third-quarter 2023 earnings on Nov 6, has an Earnings ESP of +9.47% and sports a Zacks Rank of 1 at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The consensus estimate for TreeHouse Foods’ third-quarter earnings has moved 2% north in the past 60 days. The Zacks Consensus Estimate for THS’ earnings for the quarter is pegged at 48 cents. It has an average trailing four-quarter earnings surprise of 31.4%.
Dutch Bros Inc. BROS, scheduled to release third-quarter 2023 earnings on Nov 7, currently has an Earnings ESP of +12.18% and flaunts a Zacks Rank of 1.
The Zacks Consensus Estimate for Dutch Bros’ third-quarter earnings has been unchanged in the past 60 days. The consensus estimate for BROS’ earnings for the quarter is pegged at 7 cents. It has an average trailing four-quarter earnings surprise of 44.6%.
Ollie's Bargain Outlet Holdings, Inc. OLLI, scheduled to release third-quarter earnings on Dec 6, currently has an Earnings ESP of +3.75% and a Zacks Rank of 2.
The Zacks Consensus Estimate for OLLI’s third-quarter earnings is pegged at 43 cents. The consensus estimate for the company’s quarterly earnings has been unchanged in the past 60 days. It has an average trailing four-quarter earnings surprise of 1.3%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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International Flavors & Fragrances Inc. (IFF) : Free Stock Analysis Report
TreeHouse Foods, Inc. (THS) : Free Stock Analysis Report
Ollie's Bargain Outlet Holdings, Inc. (OLLI) : Free Stock Analysis Report
Dutch Bros Inc. (BROS) : Free Stock Analysis Report
