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International Flavors & Fragrances Inc. IFF reported adjusted earnings of $1.04 per share in third-quarter 2024, missing the Zacks Consensus Estimate of $1.06 per share. However, the bottom line improved 17% from the year-ago quarter.
Including one-time items, the company reported earnings of 23 cents per share compared with the prior-year quarter’s 10 cents per share.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
International Flavors’ net sales rose 3.7% year over year to $2.93 billion and surpassed the Zacks Consensus Estimate of $2.83 billion. On a comparable basis, currency-neutral sales were up 9% compared with last year’s quarter.
The upside was driven by double-digit growth in the Health & Biosciences and Scent segments, as well as high-single digit rise in Nourish and Pharma Solutions segments. In the third quarter, volume improved across all businesses and was up 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
International Flavors’ Q3 Margins Improve Y/Y
In the reported quarter, International Flavors’ cost of goods sold was down 1.2% year over year to $1.87 billion. The gross profit improved 13.9% year over year to $1.05 billion. The gross margin was 36% compared with 32.8% in the year-ago quarter.
Research and development expenses increased 3% year over year to $162 million. The selling and administrative expenses rose 11% year over year to $495 million in the third quarter.
The adjusted operating EBITDA was $568 million, up 12.3% from the prior-year quarter’s $506 million. The adjusted operating EBITDA margin was 19.4% compared with the year-ago quarter’s 17.9%.
IFF’s Q3 Segmental Performances
Revenues in the Nourish segment improved 2.6% year over year to $1.49 billion in the September-end quarter. On a comparable basis, currency-neutral sales were up 7%. The figure came in higher than our estimate of segment sales of $1.36 billion.
The segment’s adjusted operating EBITDA was $206 million, up 15.7% year over year. Our estimate for the segment’s adjusted EBITDA was $198 million.
Revenues generated in the Health & Bioscience segment were $570 million compared with the year-earlier quarter’s figure of $518 million. Currency-neutral sales rose 12% on a comparable basis. Our estimate was $555 million for the same.
The adjusted operating EBITDA was $173 million in the third quarter compared with $150 million in the prior-year quarter. Our model had projected EBITDA of $155 million for the segment.
The Scent segment’s revenues were $613 million compared with the year-ago quarter’s $615 million. Currency-neutral sales improved 10%, driven by double-digit growth in Consumer Fragrance and Fine Fragrance and a high-single-digit increase in Fragrance Ingredients. The figure was lower than our estimate of $656 million.
The adjusted operating EBITDA fell 3.1% year over year to $127 million. The figure was lower than our projection of $139 million.
Revenues in Pharma Solutions were $256 million in the third quarter, up 8% year over year. Our estimate was $240 million for the same. Currency-neutral sales improved 8%, which was led by volume growth. The adjusted operating EBITDA rose 31.9% year over year to $62 million. Our model had projected EBITDA of $44 million for the segment.