International Flavors & Fragrances Inc.
) reported fourth-quarter 2012 adjusted earnings per share of 83
cents, up 12% from a year-ago earnings of 74 cents. Results were
a cent below the Zacks Consensus Estimate of 84 cents.
Adjusted earnings per share in 2012 were $3.98, up compared
with $3.74 earned in 2011 but below the Zacks Consensus Estimate
Net sales in the reported quarter were approximately $680.6
million, up 6% year over year and above the Zacks Consensus
Estimate of $665.0 million. On a constant currency basis, revenue
inched up 8% year over year.
The company operates in two segments: Flavors and
In the fourth quarter, revenue from the Flavors business
increased 3.0% year over year, on a constant currency basis, to
$326.4 million and accounted for 48.0% of total revenue. Revenue
from the Fragrances business was roughly 52.0% of total revenue
amounting to $354.1 million, up 13% on a constant currency
From a geographical perspective, revenue from North America
increased 7% year over year, while results from EAME were flat,
or up 5% on a constant currency basis. Revenue from Latin America
increased 16% or 20% on a constant currency basis and from
Greater Asia revenue was up 6% or 7% on a constant currency
In 2012, net sales grew 1% year over year, or 4% on a constant
currency basis to $2,821.4 million. Results were above the Zacks
Consensus Estimate of $2,802.0 million.
Gross margin in the fourth quarter increased by 430 basis
points to 42.2% based on strong volumes and effective pricing,
improved sales mix, manufacturing efficiencies, and new
business wins. Research and development expense, as a percentage
of sales, increased by 100 basis points to settle at 9.1% while
selling and administrative expense decreased by 230 basis points
Adjusted operating margin in the quarter was 14.6% compared
with 14.1% in the year-ago quarter. Interest expense plummeted
2.0% to $10.4 million in the quarter.
Exiting the fourth quarter, International Flavors &
Fragrances' cash and cash equivalents stood at $324.4 million
compared with $97.2 million in the previous quarter. Long-term
debt, net of current portions, was at $881.1 million, up from
$677.0 million in the previous quarter.
In 2012, cash flow from operating activities was $333.1 million
versus $189.2 million in the previous year. The company spent
$126.1 million on additions of property, plant and equipment as
against $127.5 million in 2011.
During 2012, the company paid dividends totalling $130.9
International Flavors & Fragrances is one of the leading
companies engaged in the creation and manufacturing of fragrance
and flavoring products in the United States and
The stock currently carries a Zacks Rank #2 (Buy). Other
stocks to watch out for in the industry are
Inter Parfums Inc.
), with a Zacks Rank #1 (Strong Buy) and
The Female Health Company
Helen of Troy Limited
), each with a Zacks Rank #2 (Buy).
FEMALE HEALTH (FHCO): Free Stock Analysis
HELEN OF TROY (HELE): Free Stock Analysis
INTL F & F (IFF): Free Stock Analysis
INTER PARFUMS (IPAR): Free Stock Analysis
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