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What's in Store for International Flavors' (IFF) Q2 Earnings?

·5 min read

International Flavors & Fragrances Inc. IFF is scheduled to report second-quarter 2022 results on Aug 8 after the closing bell.

Q1 Performance

In the last reported quarter, International Flavors’ earnings and revenues beat the Zacks Consensus Estimates and increased year over year.

The company has surpassed earnings estimates in three of the trailing four quarters and missed once, the average surprise being 9.97%.

Q2 Estimates

The Zacks Consensus Estimate for second-quarter revenues is currently pegged at $3.26 billion, indicating year-over-year growth of 5.4%. The Zacks Consensus Estimate for the June-end quarter earnings per share is pegged at $1.42, suggesting a year-over-year decline of 5.3%.

Key Factors to Note

International Flavors has been gaining from favorable markets for flavors and fragrances, supported by demand for various consumer products and growth in emerging markets. New business wins and the synergies from the Frutarom acquisition are likely to have aided the company’s performance in the quarter to be reported.

The Nourish segment continues to deliver strong results, primarily driven by the Flavors, Ingredients and Food Design businesses. The Zacks Consensus Estimate for the segment’s sales for the second quarter is pegged at $1,761 million, up 6% year over year. The consensus mark for the segment’s operating EBITDA is pegged at $317 million compared with the prior-year quarter’s $324 million.

The Scent segment has been witnessing sustained strength in Cosmetic Actives and Consumer Fragrances. Volumes have significantly picked up in the Fine Fragrance business, with consumer behavior returning to normal levels. These are likely to get reflected in the segment’s second-quarter top line. The Zacks Consensus Estimate for the segment’s sales for the second quarter is currently pegged at $553 million compared with the year-ago quarter’s figure of $550 million. The estimate for operating EBITDA for the segment is at $101 million, indicating year over year decline of 14%.

Evolving consumer buying trends are driving demand for the Home & Personal Care business, which might get reflected in the Health & Biosciences segment’s quarterly results. Growth in Grain Processing, Cultures & Food Enzymes and Animal Nutrition is expected to have contributed to the segment’s performance. The Zacks Consensus Estimate for the segment’s sales for the second quarter is pegged at $659 million, suggesting year-over-year growth of 3%. The estimate for the segment’s operating EBITDA is pegged at $171 million, down 10% from the year-ago quarter’s tally.

Strong growth in Industrial Pharma is expected to have supported the Pharma Solutions segment during the to-be-reported quarter. The Zacks Consensus Estimate for the segment’s second-quarter sales is pegged at $257 million compared with the prior-year quarter’s $232 million. The estimate for the segment’s operating EBITDA stands at $56 million, indicating a year-over-year increase of 17%.

High raw material, energy and labor costs are likely to have impacted the company’s margins in the second quarter. Manufacturing expenses are anticipated to have been higher due to the company’s efforts to meet the current high demand levels. Labor shortage and supply-chain disruptions might 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 second quarter.

International Flavors & Fragrances Inc. Price and EPS Surprise

 

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 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 0.00%.

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

You can see the complete list of today's Zacks #1 Rank stocks here.

Price Performance

In the past year, International Flavors’ shares have declined 16% compared with the industry’s fall of 30.4%.

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Stocks to Consider

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

Corteva CTVA has an Earnings ESP of +0.20% and a Zacks Rank #2. The Zacks Consensus Estimate for the company’s second-quarter 2022 revenues is pegged at $6.2 billion.

The Zacks Consensus Estimate for the company’s second-quarter earnings currently stands at $1.47 per share. CTVA has a trailing four-quarter earnings surprise of 22.3%, on average.

Grocery Outlet GO currently has an Earnings ESP of +3.55% and a Zacks Rank of 2. The Zacks Consensus Estimate for GO’s quarterly revenues stands at $859.6 million, suggesting year-over-year growth of 10.8%.

The Zacks Consensus Estimate for Grocery Outlet’s second-quarter 2022 earnings is pegged at 24 cents per share, suggesting 4.4% growth from the year-ago quarter’s levels. GO has a trailing four-quarter earnings surprise of 4.8%, on average.

Ollie's Bargain Outlet OLLI currently has an Earnings ESP of +6.06% and a Zacks Rank of 3. The Zacks Consensus Estimate for OLLI’s quarterly revenues is pegged at $458 million, which indicates an increase of 10% from the prior-year quarter’s figure.

The Zacks Consensus Estimate for Ollie's Bargain’s second-quarter 2022 earnings is pegged at 33 cents per share. The estimate projects a year-over-year decline of 36.5%. OLLI has a trailing four-quarter negative earnings surprise of 17.07%, on average.

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
 
Ollie's Bargain Outlet Holdings, Inc. (OLLI) : Free Stock Analysis Report
 
Grocery Outlet Holding Corp. (GO) : Free Stock Analysis Report
 
Corteva, Inc. (CTVA) : Free Stock Analysis Report
 
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