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International Flavors (IFF) Q2 Earnings Top on Higher Volumes
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International Flavors & Fragrances Inc. (IFF - Free Report) reported adjusted earnings of $1.16 per share in second-quarter 2024, which beat the Zacks Consensus Estimate of $1.01. The bottom line improved 15% from the year-ago quarter.
Including one-time items, the company reported earnings of 66 cents per share compared with the prior-year quarter’s 11 cents.
International Flavors’ net sales were $2.9 billion in the June-end quarter, down 1% year over year. The top line surpassed the Zacks Consensus Estimate of $2.82 billion. Currency-neutral sales grew 7% year over year, led by growth in Scent, Health & Biosciences and Nourish segments. The company reported volume growth in high-single digits.
International Flavors & Fragrances Inc. Price, Consensus and EPS Surprise
International Flavors’ cost of goods sold was down 9% year over year to $1.82 billion. The gross profit rose 14% year over year to $1.07 billion. The gross margin was 37% compared with 31.9% in the year-ago quarter.
Research and development expenses increased 7% year over year to $173 million. The selling and administrative expenses rose 11% year over year to $493 million.
Adjusted operating EBITDA was $588 million, up 15.3% from the prior-year quarter’s $510 million. The adjusted operating EBITDA margin was 20.4% compared with the year-ago quarter’s 17.4%.
Segment Performances
Revenues in the Nourish segment dipped 5.5% year over year to $1.48 billion. The figure beat our estimate of $1.42 billion. Adjusted operating EBITDA was $232 million, up 28% year over year. Our estimate for the segment’s adjusted EBITDA was $185 million.
Revenues generated in the Health & Bioscience segment were $558 million compared with the year-earlier quarter’s $522 million. Our estimate was $532 million. Adjusted operating EBITDA was $165 million compared with $145 million in the prior-year quarter. Our estimate for the segment’s adjusted EBITDA was $146 million.
The Scent segment’s revenues were $603 million compared with the year-ago quarter’s $592 million. Our projection was $591 million. Adjusted operating EBITDA improved 17% year over year to $137 million. Our model had projected EBITDA of $130 million.
Revenues in Pharma Solutions were $250 million, down 0.4% year over year. The figure surpassed our estimate of $228 million. Adjusted operating EBITDA fell 19% year over year to $54 million. Our model had projected EBITDA to be $40 million.
Financial Position
International Flavors had cash, cash equivalents and restricted cash of $671 million at the end of the second quarter, lower than the $709 million held at the end of 2023. The long-term debt was $8.6 billion at the second-quarter end compared with $9.2 billion as of Dec 31, 2023.
International Flavors generated $336 million in cash from operating activities in the first half of 2024 compared with $375 million in the prior-year comparable period.
2024 Guidance
International Flavors expects sales to be in the range of $11.1-$11.3 billion. Its prior stated expectation was near the higher end of $10.8-$11.1 billion.
Volume is expected to be up in the band of 3-5%, reflecting improvement across all segments. IFF had earlier provided a range of 0-3%. The company expects pricing to favor sales by 1% year over year.
Adjusted EBITDA is expected to be between $2.1 billion and $2.17 billion, up from the previous guided range of $1.9 - $2.1 billion.
Price Performance
In the past year, IFF’s shares have gained 20.1% against the industry’s 8.4% decline.
Kimberly-Clark Corporation (KMB - Free Report) posted second-quarter 2024 adjusted earnings of $1.96 per share, which surpassed the Zacks Consensus Estimate of $1.68. The bottom line increased 19% year over year.
Kimberly-Clark’s sales totaled $5 billion, which missed the consensus estimate of $5.1 billion. The metric inched down 2% from the year-ago period.
Kenvue (KVUE - Free Report) reported quarterly earnings of 32 cents per share, which came in line with the year-ago quarter. The bottom line, however, surpassed the Zacks Consensus Estimate of 28 cents per share.
Kenvue posted revenues of $4 billion compared with year-ago revenues of $4.01 billion. The top line beat the consensus estimate of $3.9 billion.
Newell Brands Inc. (NWL - Free Report) posted earnings per share of 36 cents, up 50% from 24 cents in the year-ago quarter. The bottom-line figure also surpassed the consensus mark of 21 cents per share.
Newell Brands’ net sales declined 8.4% year over year to $1.7 billion. Nonetheless, the metric exceeded the consensus estimate of $1.6 billion.
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International Flavors (IFF) Q2 Earnings Top on Higher Volumes
International Flavors & Fragrances Inc. (IFF - Free Report) reported adjusted earnings of $1.16 per share in second-quarter 2024, which beat the Zacks Consensus Estimate of $1.01. The bottom line improved 15% from the year-ago quarter.
Including one-time items, the company reported earnings of 66 cents per share compared with the prior-year quarter’s 11 cents.
International Flavors’ net sales were $2.9 billion in the June-end quarter, down 1% year over year. The top line surpassed the Zacks Consensus Estimate of $2.82 billion. Currency-neutral sales grew 7% year over year, led by growth in Scent, Health & Biosciences and Nourish segments. The company reported volume growth in high-single digits.
International Flavors & Fragrances Inc. Price, Consensus and EPS Surprise
International Flavors & Fragrances Inc. price-consensus-eps-surprise-chart | International Flavors & Fragrances Inc. Quote
Operational Highlights
International Flavors’ cost of goods sold was down 9% year over year to $1.82 billion. The gross profit rose 14% year over year to $1.07 billion. The gross margin was 37% compared with 31.9% in the year-ago quarter.
Research and development expenses increased 7% year over year to $173 million. The selling and administrative expenses rose 11% year over year to $493 million.
Adjusted operating EBITDA was $588 million, up 15.3% from the prior-year quarter’s $510 million. The adjusted operating EBITDA margin was 20.4% compared with the year-ago quarter’s 17.4%.
Segment Performances
Revenues in the Nourish segment dipped 5.5% year over year to $1.48 billion. The figure beat our estimate of $1.42 billion. Adjusted operating EBITDA was $232 million, up 28% year over year. Our estimate for the segment’s adjusted EBITDA was $185 million.
Revenues generated in the Health & Bioscience segment were $558 million compared with the year-earlier quarter’s $522 million. Our estimate was $532 million. Adjusted operating EBITDA was $165 million compared with $145 million in the prior-year quarter. Our estimate for the segment’s adjusted EBITDA was $146 million.
The Scent segment’s revenues were $603 million compared with the year-ago quarter’s $592 million. Our projection was $591 million. Adjusted operating EBITDA improved 17% year over year to $137 million. Our model had projected EBITDA of $130 million.
Revenues in Pharma Solutions were $250 million, down 0.4% year over year. The figure surpassed our estimate of $228 million. Adjusted operating EBITDA fell 19% year over year to $54 million. Our model had projected EBITDA to be $40 million.
Financial Position
International Flavors had cash, cash equivalents and restricted cash of $671 million at the end of the second quarter, lower than the $709 million held at the end of 2023. The long-term debt was $8.6 billion at the second-quarter end compared with $9.2 billion as of Dec 31, 2023.
International Flavors generated $336 million in cash from operating activities in the first half of 2024 compared with $375 million in the prior-year comparable period.
2024 Guidance
International Flavors expects sales to be in the range of $11.1-$11.3 billion. Its prior stated expectation was near the higher end of $10.8-$11.1 billion.
Volume is expected to be up in the band of 3-5%, reflecting improvement across all segments. IFF had earlier provided a range of 0-3%. The company expects pricing to favor sales by 1% year over year.
Adjusted EBITDA is expected to be between $2.1 billion and $2.17 billion, up from the previous guided range of $1.9 - $2.1 billion.
Price Performance
In the past year, IFF’s shares have gained 20.1% against the industry’s 8.4% decline.
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Zacks Rank
International Flavors currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of Some Consumer Staple Stocks
Kimberly-Clark Corporation (KMB - Free Report) posted second-quarter 2024 adjusted earnings of $1.96 per share, which surpassed the Zacks Consensus Estimate of $1.68. The bottom line increased 19% year over year.
Kimberly-Clark’s sales totaled $5 billion, which missed the consensus estimate of $5.1 billion. The metric inched down 2% from the year-ago period.
Kenvue (KVUE - Free Report) reported quarterly earnings of 32 cents per share, which came in line with the year-ago quarter. The bottom line, however, surpassed the Zacks Consensus Estimate of 28 cents per share.
Kenvue posted revenues of $4 billion compared with year-ago revenues of $4.01 billion. The top line beat the consensus estimate of $3.9 billion.
Newell Brands Inc. (NWL - Free Report) posted earnings per share of 36 cents, up 50% from 24 cents in the year-ago quarter. The bottom-line figure also surpassed the consensus mark of 21 cents per share.
Newell Brands’ net sales declined 8.4% year over year to $1.7 billion. Nonetheless, the metric exceeded the consensus estimate of $1.6 billion.