International Flavors & Fragrances Inc's (
) and V. Mane Fils reached an agreement to end the latter's lawsuit
concerning Monomenthyl Succinate (
International Flavors & Fragrances settled all patent and
non-patent claims brought forward in the United States District
Court by Mane. The claimant has patents issued in 1998, covering
the use of MMS as a cooling additive in food and beverage
As part of the settlement, the company will have to pay $40
million as royalty to Mane and also discontinue making and selling
its Cooler 1 products while Cooler 2 products will have MMS, as
agreed to by the parties.
The company is a creator and manufacturer of fragrance and
flavor products having operations in the United States and
internationally. Reviving global economy has accelerated consumer
spending, which is acting as a positive driver for the flavors and
Moreover, going forward, IFF's success will be driven by new
business wins, substantial geographical diversifications, wide
product lines, continuous accomplishments in research and intense
The company recently came out with its third quarter financial
results and reported adjusted earnings per share growth of 2% year
over year. Net sales grew 6% year over year attributable to new
business wins and higher sales volumes in all geographical
For the fiscal year 2011, management looks forward to achieving
the lower-end of its local currency sales growth target of 4%-6%
and EPS growth of over 10% based on year-to-date performance
and a cautious fourth quarter outlook. However, the company expects
to achieve its operating profit growth of over 7%-9%.
Notwithstanding the favorable view, results in the near term are
likely to be influenced by higher raw material costs. Moreover,
competition is intensifying in the industry with the company facing
strong competition from its peers including Danisco A/S and
The current Zacks Consensus Estimate for earnings per share for
the fourth quarter of 2011 is 71 cents, which reflects a
year-over-year growth of 2.48%. Estimates for the fiscal year 2011
and 2012 are $3.73 and $4.09, representing annual growth of 10.71%
and 9.68%, respectively.
We currently maintain a Neutral recommendation on the stock.
INTL F & F (
): Free Stock Analysis Report
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