International Flavors (IFF) International Revenue Performance Explored

Zacks Equity Research

Mon, Nov 11, 2024, 7:15 AM 5 min read

Have you looked into how International Flavors (IFF) performed internationally during the quarter ending September 2024? Considering the widespread global presence of this ingredients producer for food, cosmetics and consumer products industries, examining the trends in international revenues is essential for assessing its financial resilience and prospects for growth.

The global economy today is deeply interlinked, making a company's engagement with international markets a critical factor in determining its financial success and growth path. It has become essential for investors to comprehend how much a company relies on these foreign markets, as this understanding reveals the firm's potential for consistent earnings, its capacity to harness different economic cycles, and its overall growth prospects.

Being present in international markets serves as a counterbalance to domestic economic challenges while offering chances to engage with more rapidly evolving economies. However, this kind of diversification introduces challenges like currency fluctuations, geopolitical uncertainties and varying market trends.

Upon examining IFF's recent quarterly performance, we noticed several interesting patterns in the revenue generated from its international segments, which are commonly analyzed and observed by Wall Street experts.

For the quarter, the company's total revenue amounted to $2.93 billion, experiencing an increase of 3.7% year over year. Next, we'll explore the breakdown of IFF's international revenue to understand the importance of its overseas business operations.

A Closer Look at IFF's Revenue Streams Abroad

Europe, Africa and Middle East accounted for 32.96% of the company's total revenue during the quarter, translating to $964 million. Revenues from this region represented a surprise of +1.91%, with Wall Street analysts collectively expecting $945.98 million. When compared to the preceding quarter and the same quarter in the previous year, Europe, Africa and Middle East contributed $972 million (33.64%) and $918 million (32.55%) to the total revenue, respectively.

Of the total revenue, $381 million came from Latin America during the last fiscal quarter, accounting for 13.03%. This represented a surprise of +8.75% as analysts had expected the region to contribute $350.36 million to the total revenue. In comparison, the region contributed $360 million, or 12.46%, and $379 million, or 13.44%, to total revenue in the previous and year-ago quarters, respectively.

Greater Asia generated $694 million in revenues for the company in the last quarter, constituting 23.73% of the total. This represented a surprise of +4.71% compared to the $662.77 million projected by Wall Street analysts. Comparatively, in the previous quarter, Greater Asia accounted for $681 million (23.57%), and in the year-ago quarter, it contributed $670 million (23.76%) to the total revenue.

International Market Revenue Projections

The current fiscal quarter's total revenue for International Flavors, as projected by Wall Street analysts, is expected to reach $2.65 billion, reflecting a decline of 1.8% from the same quarter last year. The breakdown of this revenue by foreign region is as follows: Europe, Africa and Middle East is anticipated to contribute 33.4% or $885.9 million, Latin America 12.4% or $328.11 million and Greater Asia 23.4% or $620.68 million.

Analysts expect the company to report a total annual revenue of $11.34 billion for the full year, marking a decrease of 1.2% compared to last year. The expected revenue contributions from Europe, Africa and Middle East, Latin America and Greater Asia are projected to be 33.4% ($3.78 billion), 12.5% ($1.41 billion) and 23.4% ($2.65 billion) of the total revenue, in that order.

Key Takeaways

Relying on international markets for revenues, International Flavors faces both prospects and perils. Thus, tracking the company's international revenue trends is essential for accurately projecting its future trajectory.

With the increasing intricacies of global interdependence and geopolitical strife, Wall Street analysts meticulously observe these patterns, especially for companies with an international footprint, to tweak their forecasts of earnings. Importantly, several additional factors, such as a company's domestic market status, also impact these earnings forecasts.

At Zacks, a company's changing earnings outlook is given considerable attention due to its proven, strong influence on a stock's price performance in the near term. The connection here is straightforward and positive: when earnings estimates are revised upward, the stock price generally follows suit, increasing as well.

With an impressive externally audited track record, our proprietary stock rating tool - the Zacks Rank - harnesses the power of earnings estimate revisions and serves as an effective indicator of a stock's near-term price performance.

Currently, International Flavors holds a Zacks Rank #3 (Hold), signifying its potential to match the overall market's performance in the forthcoming period. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Assessing International Flavors' Stock Price Movement in Recent Times

Over the past month, the stock has lost 10.1% versus the Zacks S&P 500 composite's 4.4% increase. The Zacks Basic Materials sector, of which International Flavors is a part, has declined 1.1% over the same period. The company's shares have declined 6.4% over the past three months compared to the S&P 500's 13.1% increase. Over the same period, the sector has risen 3.6%.

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