International Flavors & Fragrances Cuts Profit Projection for Year

International Flavors & Fragrances Inc. on Monday cut its profit projection for the year following disappointing results in the latest period.

IFF, which blamed sluggish volume growth amid economic uncertainty, now projects annual profit, on a per-share basis, to improve 3% to 4% with sales increasing 2.5% to 3.5%. It previously expected per-share profit to improve 4.5% to 6.5% with sales rising 1.5% to 2.5%.

The company, which competes with the likes of Switzerland's Givaudan SA, makes flavors and fragrances found in an array of products, from cosmetics to detergents, yogurts and ice cream. Although the company is based in the U.S., it has most of its business abroad.

The company has been aggressively expanding through acquisitions and targets increasing sales by another $500 million to $1 billion through acquisitions.

Over all, third-quarter profit fell 16% to $89.8 million, or $1.12 a share. Excluding $25 million set aside for a legal matter and other items, profit fell to $1.34 a share from $1.39 a year earlier.

Sales rose 2%, or 3% adjusted for currency conversions, to $777 million.

Analysts had projected adjusted profit of $1.41 a share on $785.1 million in sales.

Gross margin narrowed to 44.6% from 45.4% a year earlier.

Fragrance revenue rose 1% in the most recent period, or 2% when adjusted for currency conversion, despite continued weakness in its fine fragrances segment. Sales in its flavors segment rose 2%, or 3% when adjusted for currency conversions.

Shares closed Monday at $131.12, up 10% this year.

Write to Maria Armental at [e-mail]

(END) Dow Jones Newswires

November 07, 2016 21:15 ET (02:15 GMT)

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