Will International Flavors (IFF) Disappoint in Q3 Earnings?

International Flavors & Fragrances Inc. IFF is scheduled to report third-quarter 2017 results on Nov 6, after market close.

In the last four quarters, the company delivered better-than-expected results in two quarters, while lagging in others. Average earnings surprise was a positive 0.93%. Notably, in the last quarter, the company’s earnings of $1.50 per share topped the Zacks Consensus Estimate by 4.17%.

Let us see how things are shaping up for the company prior to this announcement.

What’s Affecting Q3 Results?

International Flavors & Fragrances primarily supplies its products — flavor compounds, fine fragrances, consumer fragrances and fragrance ingredients — to manufacturers of perfume and toiletry, soaps, detergents, fabric care, household cleaners and air fresheners. We believe that product demand is highly susceptible to changes in consumer spending pattern, alteration in customer orders and inventory levels.

In the third quarter, we believe that tough operating conditions in Latin America, adverse impact of foreign currency translation and higher raw material costs can hurt the segmental results. Adding to the concerns is the adverse impact of industry competition.

For the Flavors segment, the Zacks Consensus Estimate for revenues stands at $403 million, lagging the average revenues of $410 million generated in the first and second quarters of 2017. Also, the operating profit for the segment is estimated to be $89 million, below an average of $99 million in the first half of the year.

Additionally, International Flavors & Fragrances expects rise in interest expenses to adversely impact its third-quarter earnings.

In the last month, the company’s shares have yielded 1.6% return, underperforming the gain of 2.1% recorded by the industry.

Earnings Whisper

Our proven model provides some idea on the stocks that are about to release their earnings results. Per the model, a stock needs to have a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or 2 (Buy) or 3 (Hold) for a likely earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks ESP: International Flavors & Fragrances currently has an Earnings ESP of -0.53%, as the Most Accurate estimate of $1.41 lags the Zacks Consensus Estimate of $1.42.

International Flavors & Fragrances, Inc. Price and EPS Surprise

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