Third-quarter net earnings at International Flavors & Fragrances slid 7.5 percent to $58.8 million, or 67 cents a diluted share, from $63.6 million, or 70 cents a diluted share in the same period a year ago.
NEW YORK — Third-quarter net earnings at International Flavors & Fragrances slid 7.5 percent to $58.8 million, or 67 cents a diluted share, from $63.6 million, or 70 cents a diluted share in the same period a year ago.
Profits were down due to a $5.9 million curtailment loss in the quarter from changes IFF made to its pension plan. Also, a combined $9 million in gains — from an insurance settlement and disposition of certain assets — last year boosted profits in the third quarter of 2006.
Analysts had expected EPS of 70 cents for the most recent quarter, according to Yahoo Finance.
Excluding the pension charge, EPS for the quarter ended Sept. 30 would have been 71 cents.
Sales during the quarter, which reached $583.3 million, up 8.2 percent from $539.1 million a year ago, were driven in part by the performance of IFF's fine fragrance business.
"Fragrance business sales were up 6 percent [3 percent in local currencies] versus the third quarter of 2006," said Robert A. Amen, chairman and chief executive officer of New York-based IFF, in a conference call to Wall Street analysts on Wednesday. Driving this gain was an 11 percent increase in both fine fragrance and beauty care sales as well as ingredient sales, the company said in a statement.
"Results in [the fragrance] business were weighed down due to lower pricing for fragrance ingredients and a weak year-over-year performance in our fabric care segment," Amen said during the call. He added, however, "I believe we've bottomed out in these areas and expect improvement in coming quarters."
IFF's sales in North America were flat due to volume decreases in the functional fragrance business that were countered by the strong performance in fine fragrances and ingredients, noted chief financial officer Douglas J. Wetmore. Growth in Europe, Africa and the Middle East was led by a 15 percent increase in ingredient sales and a 7 percent increase in fine fragrance sales, he said, adding that sales in Latin America were "particularly strong" as fine fragrance sales grew 14 percent in the quarter. There was "significant growth" in Asia, where the fine fragrance business was "very solid," said Wetmore.Year-to-date profits reached $199.9 million, or $2.23 a share, a 12 percent increase from $178.5 million, or $1.95 a share, a year ago, on sales that rose 8.9 percent to $1.72 billion from $1.58 billion a year ago.
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