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International Flavors (IFF) Q4 Earnings: Will it Disappoint?

International Flavors & Fragrances Inc.IFF is scheduled to report fourth-quarter 2016 results on Feb 15, after market close.

The company posted better-than-expected results in two of the last four quarters while lagged estimates in two. Average earnings surprise was a negative 1.29%. Since the release of its third-quarter results on Nov 7, the company's shares lost 10.1%, against the gain of 12.27% recorded by the Zacks categorized Chemicals Specialty industry.

Let us see how things are shaping up for International Flavors & Fragrances prior to this announcement.

Factors to Affect Q4 Results

International Flavors & Fragrances' operations are highly sensitive to economic conditions in the global arena. We believe that prevalent macro headwinds might have affected consumer spending, leading to a change in customer order pattern. In case of order cancellation or reduced orders, the company's financials will be compromised. Also, alteration in the level of inventory may adversely affect the industry as well as the company's businesses.

Geographical diversification has exposed International Flavors & Fragrances to risks arising from unfavorable foreign currency movements. For 2016, the company predicts a negative foreign currency impact of 1.5% on revenue growth and roughly 2% impact on both operating profit and earnings per share growth.

The woes continues for International Flavors & Fragrances, as it faces risks from intense competition in the industry, disruptions in the supply or quality of ingredients or rising prices of ingredients purchased and failure or delay in research and development.

Earnings Whispers

Our proven model does not conclusively show that International Flavors & Fragrances will be able to pull an earnings surprise this quarter. The stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

This is not the case with International Flavors & Fragrances as you will see below.

Zacks ESP: International Flavors & Fragrances currently has an Earnings ESP of 0.00%, with both the Most Accurate estimate and the Zacks Consensus Estimate pegged at $1.16.

Internationa Flavors & Fragrances, Inc. Price and EPS Surprise

Internationa Flavors & Fragrances, Inc. Price and EPS Surprise | Internationa Flavors & Fragrances, Inc. Quote

Zacks Rank: International Flavors & Fragrances currently carries a Zacks Rank #4 (Sell).

As it is we caution against stocks with Zacks Rank #4 or #5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies that you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Versum Materials, Inc. VSM , with an Earnings ESP of +7.5% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here .

Platform Specialty Products Corporation PAH , with an Earnings ESP of +13.33% and a Zacks Rank #3.

American Vanguard Corporation AVD , with an Earnings ESP of +23.08% and a Zacks Rank #3.

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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 Nasdaq, Inc.


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

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