IFF Reports In Line, Falls Y/Y - Analyst Blog


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International Flavors & Fragrances Inc. ( IFF ) reported first-quarter 2012 adjusted earnings per share of $1.00, in line with the Zacks Consensus Estimate. The results reported a net fall of 3 cents from $1.03 reported in the year-ago quarter.

GAAP earnings per share, including restructuring and other costs, came in at 99 cents versus $1.03 in the year-ago quarter.


Net sales in the reported quarter were $710.6 million, down 1% year over year and below the Zacks Consensus Estimate of $713.0 million. On a constant currency basis, revenue inched up 1% year over year.

The company operates in two segments: Flavors and Fragrances.

Revenue from the Flavors business in the first quarter increased 5.0% year over year, on a constant currency basis, to $349.9 million and accounted for 49.2% of total revenue. Revenue from the Fragrances business was roughly 50.8% of total revenue amounting to $360.7 million, down 3% year over year on a constant currency basis. 

From a geographical perspective, revenue from North America inched up 2% year over year, while results from EAME registered a decline of 4%, or 2% on a constant currency basis. Revenue from Latin America increased 3% or 4% on a constant currency basis and from Greater Asia revenue were flat year over year or up 1% on a constant currency basis.


Gross margin in the first quarter decreased by 140 basis points to 40.2% based on higher cost of sales. Research and development expense, as a percentage of sales, increased by 10 basis points to settle at 8.1% while selling and administrative expense decreased by 10 basis points to 14.8%.

Adjusted operating margin in the quarter was 17.2% compared with 18.7% in the year-ago quarter. Interest expense plummeted 7.4% to $10.8 million in the quarter.

Balance Sheet

Exiting the first quarter, International Flavors & Fragrances had cash and cash equivalents of approximately $76.5 million, down from $88.3 million in the previous quarter. Long-term debt, net of current portions, stood at $778 million, flat on a sequential basis.

Cash Flow

Cash flow from operating activities in the first quarter of 2012 was $52.62 million versus cash outflow of $34.9 million in the year-ago quarter. Capital spending increased to $28.8 million versus $19.4 million in the comparable quarter of 2011.

During the quarter, the company paid dividends totaling $25.1 million.

International Flavors & Fragrances is one of the leading companies engaged in the creation and manufacturing of fragrance and flavor products in the United States and internationally. We believe that the company's success will be driven by its substantial geographical presence and product mix.

INTL F & F (IFF): Free Stock Analysis Report
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