International Flavors & Fragrances Inc. (IFF) is scheduled to report third-quarter 2014 results on Nov 4 before the market opens. The Zacks Consensus for the quarter is pegged at $1.31.
The company reported better-than-expected results in the last four trailing quarters, with an average earnings surprise of +2.89%. In second-quarter 2014, earnings of $1.37 per share surpassed the Zacks Consensus Estimate of $1.35. Let us see how things are shaping up for this quarter.
Factors to Influence Q3 Results
Emerging markets will continue to contribute significantly to International Flavors’ revenues, as growing population and wealth creation in these countries would spur demand for consumer products and hence, boost product demand for the company. In addition, the company’s research and development wing constantly endeavors to develop new and innovative compounds.
However, presence of headwinds cannot be ruled out completely for International Flavors & Fragrances. Adverse currency movements are likely to influence third-quarter results while geopolitical issues in some foreign countries, where the company operates, might negatively impact results. Lower volumes from the North American flavors business is another concerning factor.
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, 2 or 3 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 +0.76%, with the Most Accurate estimate of $1.32 surpassing the Zacks Consensus Estimate of $1.31.
Zacks Rank: International Flavors & Fragrances carries a Zacks Rank #4 (Sell), which when combined with a positive ESP makes surprise prediction difficult.
We caution against stocks with Zacks Ranks #4 and #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revision momentum.
Other Stocks to Consider
Here are some companies that you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Minerals Technologies Inc. (MTX), with an Earnings ESP of +4.85% and a Zacks Rank #1 (Strong Buy).
Celanese Corp. (CE), with an Earnings ESP of +1.71% and a Zacks Rank #2 (Buy).
Ashland Inc. (ASH), with an Earnings ESP of +2.21% and a Zacks Rank #3 (Hold).
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