International Flavors & Fragrances Inc. posted record earnings per share that soared 29.9 percent to 87 cents a diluted share in the second quarter, from 67 cents a year ago, despite higher interest expense and "disappointing" sales of functional...
NEW YORK — International Flavors & Fragrances Inc. posted record earnings per share that soared 29.9 percent to 87 cents a diluted share in the second quarter, from 67 cents a year ago, despite higher interest expense and "disappointing" sales of functional fragrances and ingredients in Latin America.
A favorable tax rate during the quarter ended June 30 helped propel net earnings to $78.4 million, a 28.1 percent jump from $61.2 million in the year-ago period. Sales rose by 8.1 percent, or 5 percent in local currencies, to $573.7 million from $530.5 million a year ago, boosted in part by an 11 percent growth on the flavors side.
Robert A. Amen, chairman and chief executive officer of New York-based IFF, told analysts during a Webcast of the company's results Tuesday that while the fine fragrances and beauty care businesses had "strong performances," functional fragrances results were "mixed." There were a couple of markets, he said, "where we had some disappointment."
While fragrance sales in Latin America "continued its strong growth," said chief financial officer Douglas J. Wetmore, "both functional fragrances and ingredient [sales] were affected by erosion of the existing business" in the region, where, ultimately, sales grew by 1 percent.
Overall, fragrance sales were up by 6 percent, or 3 percent in local currencies, driven by growth in fine fragrance and beauty care sales that reached 11 percent, helped by new product introductions and strength in existing business.
IFF experienced "excellent results in fine and functional fragrances" in North America, Wetmore said, where fragrance sales grew by 7 percent. "We remain confident we are growing faster than the market overall and increasing our market share," he said.
First-half profits increased by 22.8 percent to $141.1 million, or $1.56 a share, from $114.9 million, or $1.25, a year ago. Revenues in the first half rose by 9.4 percent reaching $1.14 billion from $1.04 billion in the same period a year ago.
IFF said this year's results are, so far, in line with goals outlined for the next two years that call for gross sales to grow at more than 4 percent, for operating margins to exceed 18 percent and for EPS to grow by 10 percent or more.
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