International Flavors & Fragrances Inc. (IFF): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
International Flavors & Fragrances' third-quarter 2014 adjusted earnings came in at $1.32, up 8.2% year over year but in line with the Zacks Consensus Estimate. On a constant currency basis, revenues grew 4% driven by solid product portfolio, higher emerging market sales and benefits from Aromor acquisition, offset partially by a sales decline in North America. For 2014, the company maintained its revenue growth forecast at 4-6%, including 1% growth from Aromor. The Fragrances business is expected to grow modestly in fourth quarter while Flavors business is likely to exhibit strong sales momentum. However, adverse foreign currency movements and higher costs can impede growth momentum. Thus, we maintain a Neutral recommendation on the stock.


Overview:

NY-based International Flavors & Fragrances Inc. (IFF), together with its subsidiaries, engages in the creation and manufacture of fragrance and flavor products in the U.S. and internationally. The company operates in 31 countries and has approximately 6,000 employees. It functions in two segments, Flavors and Fragrances.

The Flavors segment (48.2% of net revenues in 2013) offers flavor compounds to the food and beverage industries for use in consumer products, such as processed foods, beverages, dairy, food and confectionery products.

The Fragrances segment (51.8% of net revenues in 2013) provides various functional fragrances like fragrance compounds for personal care and household products, fine fragrance and beauty care, including perfumes, colognes and toiletries and synthetic ingredients that could be combined with other materials to create functional and fine fragrance compounds. This segment markets its products primarily to the cosmetics industry, including perfume and toiletry manufacturers, and to household products industry comprising manufacturers of soaps, detergents, fabric care, household cleaners and air fresheners.

International Flavors & Fragrances ranks among the top four companies in the flavors and fragrances industry in the world. These companies, combined together, generated nearly two-thirds of the industry's revenues in 2013.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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