International Flavors & Fragrances Inc.
) reported fourth-quarter 2013 adjusted earnings per share of 92
cents, up 10.8% from year-ago earnings of 83 cents. The
bottom-line result was 2 cents above the Zacks Consensus
Including one-time items, the company reported GAAP earnings per
share of $0.75, down 9.6% year over year.
In 2013, adjusted earnings per share were $4.46, way above $3.98
recorded in 2012 and in line with the Zacks Consensus Estimate.
International Flavors & Fragrances generated net sales of
$725.2 million in the reported quarter, up 6.6% year over year
and above the Zacks Consensus Estimate of $708.0 million. On a
constant currency basis, revenue inched up 7% year over year,
driven by solid growth in the emerging markets.
The company operates in two segments: Flavors and Fragrances.
In fourth-quarter 2013, revenue from the Flavors business
increased 7.0% year over year, on a constant currency basis, to
$343.0 million and accounted for 47.3% of total revenue. Revenue
from the Fragrances business was roughly 52.7% of total revenue,
amounting to $382.2 million, up 7% on a constant currency basis.
From a geographical perspective, revenue from North America
decreased 5% year over year, while results from EAME were up 13%
year over year or up 10% on a constant currency basis. Revenue
from Latin America increased 9% year over year or 10% on a
constant currency basis and from Greater Asia revenue was up 8%
year over year or 12% on a constant currency basis.
In 2013, International Flavors & Fragrances generated net
sales of $2,952.9 million, up 4.7% year over year and above the
Zacks Consensus Estimate of $2,935.0 million. On a constant
currency basis, revenue increased by 5%.
International Flavors & Fragrances' adjusted gross margin in
fourth-quarter 2013 increased by 160 basis points to 43.8% based
on new business wins, effective product mix, innovations and cost
reductions. Research and development expense, as a percentage of
sales, increased by 60 basis points to settle at 9.7% while
selling and administrative expense increased by 10 basis points
Adjusted operating margin in the quarter was 15.4% compared with
14.6% in the year-ago quarter. Interest expense increased 6.8% to
$11.1 million in the quarter.
Exiting the fourth quarter of 2013, International Flavors
& Fragrances' cash and cash equivalents were $405.5 million,
up 18.2% from $343.1 million in third-quarter 2013. Long-term
debt was at $932.7 million versus $933.5 million in the previous
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In 2013, International Flavors & Fragrances generated roughly
$407.6 million net cash from operating activities, up 25.9% year
over year. Capital spending escalated 6.4% to $134.2 million in
International Flavors & Fragrances paid cash dividends of
$87.3 million to shareholders in 2013.
International Flavors & Fragrances currently has a market
capitalization of $7.2 billion and carries a Zacks Rank #2 (Buy).
Other similarly-ranked stocks in the industry include
Globe Specialty Metals, Inc.
Sensient Technologies Corp.