Third-quarter profits at International Flavors & Fragrances Inc. were driven down 8.5 percent by restructuring and other charges, the company reported Wednesday.
This story first appeared in the November 5, 2009 issue of WWD. Subscribe Today.
Net earnings for the three months ended Sept. 30 were $52.8 million, or 66 cents a diluted share, compared with $57.7 million, or 73 cents, in the same period a year ago.
Stripping out the restructuring and other expenses, which included the closure of manufacturing plants in the U.K. and Ireland, as well as separation costs related to the departure of the firm’s former chief executive officer, Robert M. Amen, adjusted earnings per share came in at 82 cents, compared to 74 cents in the year-ago period.
On average, Wall Street analysts had estimated EPS of 72 cents, according to Yahoo Finance.
IFF’s third-quarter sales were down 0.8 percent to $612.6 million, from $617.5 million in the year-ago period. On a local currency basis, revenues were up by 2 percent, according to the firm.
IFF expects to complete the closure of a fragrance ingredients chemical plant in Haverhill, U.K., and the closure of its fragrance manufacturing facility in Drogheda, Ireland, by the fourth quarter of 2010, resulting in the elimination of 140 jobs, IFF stated in a recent filing with the Securities and Exchange Commission.
While some cost savings are expected to be realized in the latter half of 2010, the annual expected benefit of $17 million to $20 million resulting from the closures will not fully be realized until 2011, the company said in the filing.
Commenting on the results for the third quarter, Kevin Berryman, IFF’s executive vice president and chief financial officer, told analysts during a conference call Wednesday morning that the firm achieved its “highest adjusted quarterly EPS in company history.”
While the firm was “very pleased with our performance” in the just-concluded quarter, he added the outlook going forward is guardedly optimistic despite improvements in the operating environment in which the company does business.
Fragrance sales declined 0.6 percent to $337.2 million, from $339.3 million in the third quarter a year ago. In the first nine months of the year, fragrance sales were down by 7.9 percent to $929.2 million, from $1.01 billion in the same year-ago period.
Year-to-date, net profits were $148.1 million, or $1.86 a diluted share, down by 18 percent from $180.7 million, or $2.24 a share, on sales that were down 5.9 percent to $1.74 billion, from $1.85 billion.