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What do the first quarter results of International Flavors (IFF) have in store for us?

International Flavors and Fragrances Inc. The IFF is expected to release its first quarter 2022 results on May 9 after the closing bell.

Fourth quarter performance

In the most recently reported quarter, International Flavors’ earnings and revenue beat Zacks’ consensus estimates. While the net income figure decreased, revenue increased year-over-year.

The company has exceeded earnings estimates in three of the past four quarters and missed once, with the average surprise being 4.2%.

First quarter estimates

Zacks’ consensus estimate for Q1 revenue is currently pegged at $3.18 billion, indicating 29% year-over-year growth. Zacks’ consensus estimate for earnings per share for the end-December quarter is pegged at $1.31, suggesting an 18.1% year-over-year decline.

Key Factors to Note

International Flavors benefited from favorable markets for flavors and fragrances, supported by demand for a variety of consumer products and growth in emerging markets. New contracts and synergies from the acquisition of Frutarom likely contributed to the company’s performance in the quarter to report.

The Nourishment segment continues to show strong results, mainly driven by the Flavors and Ingredients unit. The segment is gaining thanks to the rebound in Food Design and the improvement in demand for Food Service. Zacks’ consensus estimate for segment sales for the first quarter is set at $1,718 million. The consensus mark for segment operating EBITDA is set at $310 million.

The Perfumes segment saw sustained strength in Cosmetic Active Ingredients and Consumer Perfumes. Volumes recovered in the Fine Fragrance business as consumer behavior returned to normal levels. These should be reflected in segment sales in the first quarter. Zacks’ consensus estimate for segment sales for the first quarter is currently pegged at $604 million. The operating EBITDA estimate for the segment is $113 million.

Changing consumer buying trends are driving demand for the Home & Personal Care business, which could be reflected in quarterly results for the Health & Biosciences segment. The growth of Grain Processing and Cultures & Food Enzymes should have contributed to the performance of the segment. Zacks consensus estimate for segment sales for the first quarter is set at $649 million. The operating EBITDA estimate for the segment is set at $172 million.

Strong growth in Industrial Pharma is expected to have supported the Pharma Solutions segment in the reporting quarter. Zacks’ consensus estimate for the segment’s first-quarter sales is set at $232 million. The operating EBITDA estimate for the segment is $52 million.

High raw material, energy and labor costs likely impacted the company’s margins in the first quarter. Manufacturing expenses are expected to have been higher due to the company’s efforts to meet current high levels of demand. Labor shortages and supply chain disruptions may have impacted the company’s production in the quarter ahead. Despite its pricing actions and cost-cutting efforts, these factors likely weighed on the company’s margins in the first quarter.

International Flavors & Fragrances Inc. EPS Awards and Surprise

International Flavors & Fragrances Inc. EPS Awards and Surprise

International Flavors & Fragrances Inc. price-eps-surprise | International Flavors & Fragrances Inc. Quote

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for International Flavors this season. The combination of a positive Earnings ESP and a Zacks rank of #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of beating Earnings. But it is not the case here.

You can discover the best stocks to buy or sell before they’re flagged with our earnings ESP filter.

ESP Earnings: The earnings ESP for international flavors is +3.05%.

Zack’s Ranking: International Flavors currently wears a Zacks rank #4 (sale).

You can see the full list of today’s Zacks #1 Rank stocks here.

Price performance

Over the past year, the company’s shares have fallen 13.6%, compared to a 30% loss for the industry.

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Actions to Consider

Here are a few core consumer stocks you might want to consider, as our model shows they have the right mix of elements to post earnings beats in their next iterations:

Olaplex Holdings, Inc. OLPX has a +6.93% win ESP and a #2 Zacks rank. Zacks’ consensus estimate for the company’s Q1 2022 revenue is set at $172 million.

Zacks’ consensus estimate for the company’s first-quarter earnings currently stands at 11 cents. OLPX has an earnings surprise for the last four quarters of 11.1% on average.

U.S. Foods Holding Corp. USFD currently has an earnings ESP of +19.32% and a Zacks rank of 3. The Zacks consensus estimate for USFD’s quarterly revenue is $7.8 billion, which suggests 23.9% year-over-year growth.

Zacks’ consensus estimate for US Foods’ first-quarter 2022 earnings is pegged at 29 cents per share, suggesting 142% growth from year-ago quarter levels. The USFD has an earnings surprise for the last four quarters of 33.6% on average.

Celsius Holdings, Inc. CELH currently has an earnings ESP of +12.50% and a Zacks ranking of 3. The Zacks consensus estimate for CELH’s quarterly revenue is set at $118 million, indicating a 135% increase over compared to the figure for the quarter of the previous year.

The Zacks consensus estimate for Celsius Holdings’ first quarter 2022 earnings is set at 3 cents per share. The estimate calls for 200% year-over-year growth. CELH has a surprise on earnings for the last four quarters of 156.3% on average.

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International Flavors & Fragrances Inc. (IFF): Free Inventory Analysis Report

U.S. Foods Holding Corp. (USFD): Free Stock Analysis Report

Celsius Holdings Inc. (CELH): Free Stock Analysis Report

Olaplex Holdings, Inc. (OLPX): Free Stock Analysis Report

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