International Flavors & Fragrances Inc.

International Flavors & Fragrances delivered a mixed set of results in the quarter. The sales revenue for IFF was $2.8 billion which was below Wall Street expectations but the company did manage an earnings beat. Sales were up 4% on a comparable, currency-neutral basis for the quarter, with increases seen in almost all divisions. The company also observed growth in Nourish, Scent, and Pharma Solutions divisions. Despite drops in Health & Grain Processing and a 3% loss in comparable currency neutral sales, Health & Bioscience produced strong results in Animal Nutrition and Cultures & Food Enzymes. However, revenue fell in health and bioscience, which overlapped with the robust double-digit increase from the previous year. H&B is up 5% on a 2-year average. Besides that, their scent division performed well, achieving a 6% year-over-year sales increase, driven by double-digit growth in fine fragrance and mid-single-digit growth in consumer fragrance. The Pharma Solutions division performed admirably in the quarter, with revenues of $221 million. However, price gains and productivity were more than offset by lower volumes and higher energy costs at Nourish and H&B. We give International Flavors & Fragrances, Inc. a ‘Hold’ rating with a revised target price.