International Flavors & Fragrances Inc
) adjusted earnings came in at $1.37 per share in second-quarter
2014, reflecting an increase of 20.2% from $1.14 earned in the
year-ago quarter. The bottom-line result surpassed the Zacks
Consensus Estimate of $1.35 per share.
Including one-time items, the company reported Generally Accepted
Accounting Principles (GAAP) earnings of $1.35 per share, up 8.9%
year over year.
International Flavors & Fragrances Inc -
Earnings Surprise | FindTheBest
International Flavors & Fragrances generated net revenues of
$788.4 million, up 4.1% year over year, but below the Zacks
Consensus Estimate of $795.0 million. On a constant currency basis,
revenues climbed 4% year over year.
The company operates in two segments: Flavors and Fragrances.
Revenues from the Flavors business grew marginally by 0.4% year
over year to $375.5 million, accounting for 47.6% of total revenue.
On a constant currency basis, revenues increased 1% year over year.
The Fragrances business, comprising 52.4% of total revenue,
generated $412.9 million revenues, up 7.6% year over year. On a
constant currency basis, revenues rose 6% year over year.
From a geographical perspective, International Flavors &
Fragrances' revenues from North America inched up 1% year over
year; while revenues from Europe, Africa and the Middle East (EAME)
were up 7% year over year or 2% on a constant currency basis.
Revenue from Latin American operations increased 4% year over year
or 7% on a constant currency basis; while from Greater Asia,
revenue was up 3% year over year or 6% on a constant currency
International Flavors & Fragrances' adjusted gross margin was
45.1%, up 90 basis points (bps) year over year on the back of new
business wins, effective product mix, innovations and cost
reductions. Research and development expense, as a percentage of
sales, was at 8.4%, down 10 bps year over year, while selling and
administrative expenses increased by 40 bps to 16.9%.
Adjusted operating margin was 19.8% versus 19.2% in the year-ago
quarter. Interest expense came down by 11.3% to $11.4 million.
Exiting second-quarter 2014, International Flavors &
Fragrances' cash and cash equivalents were $326.9 million, up 21.7%
from $268.6 million in the preceding quarter. Long-term debt inched
up 0.11% sequentially at $932.6 million.
International Flavors & Fragrances generated cash of $154.0
million from its operating activities in the first-half 2014 as
compared with $118.0 million in the year-ago comparable period.
Capital spending was $60.2 million, relatively flat year over year.
Cash dividends paid totalled $63.4 million in the first half of
2014, significantly above $27.7 million paid in the year-ago
Along with the earnings release, International Flavors &
Fragrances announced that its board of directors, on Aug 4, had
authorized an increase of 8 cents or 21% in the quarterly dividend
rate. The revised rate now stands at 47 cents per share versus the
earlier 39 cents and will be paid on Oct 7 to shareholders of
record as on Sep 25.
International Flavors & Fragrances anticipates lower volume in
North America for its Flavors business in third-quarter 2014.
Taking this into account, the company lowered its 2014 sales growth
guidance to the range of 4-6% from 5-7% projected earlier. The
revised forecast includes 1% contribution from the Aromor
Operating profit will be boosted by cost reductions and
manufacturing efficiencies. International Flavors & Fragrances
expects double-digits growth for both adjusted operating profit and
adjusted earnings per share.
With a market capitalization of $7.8 billion, International Flavors
& Fragrances presently carries a Zacks Rank #3 (Hold). Some
better-ranked stocks in the industry include Green Plains Inc. (
), Minerals Technologies Inc. (
) and Globe Specialty Metals, Inc. (
). While Green Plains and Minerals Technologies sport a Zacks Rank
#1 (Strong Buy), Globe Specialty Metals holds a Zacks Rank #2
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
INTL F & F (IFF): Free Stock Analysis
MINERAL TECH (MTX): Free Stock Analysis Report
GREEN PLAINS (GPRE): Free Stock Analysis Report
GLOBE SPECIALTY (GSM): Free Stock Analysis
To read this article on Zacks.com click here.