International Flavors & Fragrances Inc.
) 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
GAAP earnings per share, including restructuring and other
costs, came in at 99 cents versus $1.03 in the year-ago
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
The company operates in two segments: Flavors and
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
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.
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
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
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
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