International Flavors & Fragrances Inc. IFF is scheduled to report second-quarter 2015 results on Aug 10 after the market closes. The Zacks Consensus Estimate for the quarter is pegged at $1.35.
The company has performed well in the last four trailing quarters, with a positive average earnings surprise of 1.87%. Last quarter, the company’s earnings of $1.45 per share surpassed the Zacks Consensus Estimate of $1.42. Let us see how things are shaping up for this quarter.
Factors to Affect Q2 Results
International Flavors & Fragrances stands well positioned to benefit from the growing demand for flavors and fragrances, especially in the emerging countries. The company’s research and development wing constantly endeavors to develop innovative compounds for suitably meeting the rising demand.
In addition, International Flavors & Fragrances will likely benefit from gains reaped from acquired assets. Moreover, the company’s commitment to reward its shareholders with dividends and share buyback will work in its favor. In Aug 2015, the company completed the acquisition of Lucas Meyer Cosmetics, and also declared a 20% increase in quarterly its dividend rate apart from announcing a $250-million share buyback program.
However, International Flavors & Fragrances is not immune to the negative impact of near-term headwinds. Adverse currency movements are likely to hurt the company’s profitability in the quarter; while geopolitical issues in some foreign countries served might negatively affect its results. Also, intense competition from the existing or future rivals, coupled with aggressive price competition, might force the company to reduce prices or increase spending, which would impact its sales and profits.
Earnings Whispers
Our proven model does not conclusively show that International Flavors & Fragrances is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: International Flavors & Fragrances has an Earnings ESP of +1.48%, with the Most Accurate estimate of $1.37 exceeding the Zacks Consensus Estimate of $1.35.
Zacks Rank: International Flavors & Fragrances currently carries a Zacks Rank #4 (Sell).
Stocks to Consider
Here are some companies that you may want to consider instead as our model shows they have the right combination of elements to post an earnings beat this quarter:
LyondellBasell Industries N.V. LYB, with an Earnings ESP of +4.80% and a Zacks Rank #2.
Chemtura Corporation CHMT, with an Earnings ESP of +3.03% and a Zacks Rank #3.
Albemarle Corporation ALB, with an Earnings ESP of +1.04% and a Zacks Rank #3.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment