International Flavors & Fragrances Inc. (IFF), a leading global creator of flavors and fragrances for consumer products, announced financial results for the fourth quarter and full year 2009.
 
Reported earnings per share (EPS) was 63 cents, compared to 50 cents in the fourth quarter of 2008. This was slightly above the Zacks Consensus Estimate of 60 cents. EPS for the full year 2009 decreased 3% to $2.69 versus $2.76 in the prior year, as strong second half performance substantially minimized the impact of first half weakness. Full year EPS was also above the Zacks Consensus Estimate of $2.66.
 
Quarterly revenues grew 9% over the prior-year period to $586 million. However, for the full year 2009, the company reported revenues of $2.3 billion, a 3% decrease from 2008.
 
During the reported quarter, Flavor Business Unit sales increased 1% year over year and during full year 2009, sales increased 2%. During the quarter, Fragrance Business Unit sales increased 4% year over year, while during 2009, it decreased 1%, compared to 2008.
 
Cash flow from operations improved by $71 million to $292 million for the full year 2009, compared to $221 million during 2008. The improvement in operating cash flows was led by a reduction in inventories combined with better operating discipline over receivables and payables.
 
The company is adapting several measures to reduce costs, which will enhance margin levels in the future. Moreover, the potential to gain market share by providing unique solutions to customers upholds the company’s brands in the marketplace. Thus, we reiterate our Neutral recommendation on the stock.
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