International Flavors & Fragrances Inc. IFF is scheduled to report second-quarter 2024 results on Aug 6, after the closing bell.
The Zacks Consensus Estimate for IFF’s second-quarter revenues is pegged at $2.82 billion, indicating a 3.6% fall from the year-ago reported figure.
The consensus estimate for second-quarter earnings is pegged at 91 cents per share. The Zacks Consensus Estimate for IFF’s earnings has moved up 3% in the past 60 days. The estimate indicates a year-over-year rise of 5.8%.
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Earnings Surprise History
International Flavors’ earnings beat the Zacks Consensus Estimates in two of the trailing four quarters and missed in the others, the average surprise being 6.5%.
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What the Zacks Model Unveils
Our model predicts an earnings beat for International Flavors this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is precisely the case here, as you can see below.
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Earnings ESP: International Flavors has an Earnings ESP of +21.04%.
Zacks Rank: IFF currently carries a Zacks Rank of 2.
Factors Likely to Have Shaped Q2 Performance
International Flavors has been bearing the brunt of low consumer spending and customer destocking for the past few quarters. These conditions are anticipated to have continued and impacted the company’s performance in the to-be-reported quarter. High raw material, energy and labor costs are likely to have impacted the company’s margins in the second quarter.
However, the headwinds are expected to have been offset by the company's ongoing efforts to improve productivity and reduce costs. IFF has been focusing on accelerating growth through organic investments and strategic acquisitions while returning capital to shareholders. This is also likely to have favored the company’s margins in the quarter.
Segmental Estimates
In the first quarter of 2024, the company reported a volume decline in the Functional Ingredients business, which falls under the Nourish segment. This weakness in the Functional Ingredients business is expected to have been a drag on the company’s overall volumes in the second quarter.
Our model estimates the Nourish segment’s second-quarter sales to be down 9% year over year to $1.42 billion. The projection for the segment’s operating EBITDA is pegged at $185 million, indicating a rise of 2.2% from the year-ago quarter’s actual, backed by strategic actions to rapidly improve the performance.
We expect the Scent segment’s sales to fall 0.1% year over year to $591 million. The ongoing momentum in Consumer Fragrance, as well as improvement in Fine Fragrance is likely to have been partially offset by higher costs. Our estimate for the segment’s quarterly operating EBITDA is $129.5 million, suggesting year-over-year growth of 10.6%.
The projection for the Health & Biosciences segment’s sales for the second quarter is $532 million, indicating a 1.9% increase from the year-ago quarter’s reported figure. We expect operating EBITDA to increase 0.8% to $146 million in the quarter.
The Pharma Solutions segment’s sales are projected to fall 9.3% year over year to $228 million. The segment's operating EBITDA is expected to fall 40.2% to $40 million from the year-ago quarter’s reported number.
Price Performance
In the past year, IFF shares have gained 21.3% against the industry’s 6.9% decline.
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Other Stocks to Consider
Here are some other Consumer Staples stocks, which, according to our model, have the right combination of elements to post an earnings beat in their upcoming releases:
Ollie's Bargain Outlet Holdings, Inc. OLLI, expected to release earnings soon, has an Earnings ESP of +2.38% and currently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for OLLI’s earnings for the second quarter of 2024 is pegged at 78 cents per share, indicating year-over-year growth of 16.4%. OLLI has a trailing four-quarter average surprise of 10.4%.
Dutch Bros Inc. BROS is scheduled to release its second-quarter results on Aug 7. It has an Earnings ESP of +11.37% and a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for BROS’s earnings is pegged at 13 cents per share, indicating no change from the year-ago actuals. It has a trailing four-quarter average surprise of 159%.
Church & Dwight Co., Inc. CHD, scheduled to release second-quarter 2024 earnings on Aug 2, currently has an Earnings ESP of +2.60% and a Zacks Rank of 3.
The Zacks Consensus Estimate for CHD’s earnings for the second quarter is pegged at 84 cents, suggesting a year-over-year decline of 8.7%. It has a trailing four-quarter average earnings surprise of 9.6%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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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.
