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LONDON — International Flavors & Fragrances Inc. Thursday reported higher fourth-quarter earnings despite a drop in sales.
For the three months ended Dec. 31, net income was up 3.7 percent to $49 million, or 62 cents a diluted share, from $47.2 million, or 58 cents a year ago. Stripping out nonrecurring items, earnings per share dropped to 50 cents from 53 cents but beat analysts estimates, as published by Yahoo Finance, of 46 cents. Sales dipped 2.6 percent to $539.1 million from $553.5 million.
For the full year, net income dropped 7.1 percent to $229.6 million, or $2.87 a diluted share, from $247.1 million, or $2.82. The company said the drop was mainly attributable to a $32 million hike in interest expense, “partially offset by higher volume and favorable currency impacts.” Sales for the year were up 5 percent to $2.39 billion.
“I am generally pleased with our 2008 financial performance, especially in light of the challenging economic and market conditions we faced this year,” stated Robert Amen, IFF chairman and chief executive officer. “Our fragrances business improved its performance in the fourth quarter but ended the year slightly below 2007 results.”
The New York-based flavors and fragrances giant said total fragrance sales in the fourth quarter decreased 4 percent and were flat in local currencies.
“It is unusually difficult to forecast the first quarter,” Amen said during a conference call with analysts. “Given what I see today in our forecasts and order book, it appears to me that we’re on track to have local currency sales roughly in line with the first quarter of 2008, perhaps a little bit lower, perhaps a little bit above.”
A performance improvement plan, which will impact 90 jobs, will be fully implemented in 2009, the company said.