International Flavors & Fragrances Inc. IFF impressed its investors with better-than-expected results for first-quarter 2016. Adjusted earnings came in at $1.47 per share, above the Zacks Consensus Estimate of $1.41 and 1.4% above the year-ago tally of $1.45 per share. Excluding approximately 10% adverse impact from unfavorable foreign currency movements, quarterly earnings increased 11% year over year.International Flavors & Fragrances Inc. - Earnings Surprise | FindTheBest Talking about International Flavors & Fragrances’ top line, net sales generated $783.3 million, roughly in-line with the Zacks Consensus Estimate of $783 million. Compared with the year-ago quarter, the company’s net sales inched up 110 basis points (bps). On a constant currency basis, revenues climbed 6% year over year.From a geographical perspective, revenues in North America increased 11% year over year; while revenues in Europe, Africa and the Middle East were down 5% year over year or up 2% on a constant currency basis. Revenues from Latin American operations were flat year over year or grew 8% on a constant currency basis; while that in Greater Asia were flat year over year or up 4% on a constant currency basis.Segmental DetailsInternational Flavors & Fragrances operates in two segments: Flavors and Fragrances.Revenues derived from the Flavors business decreased 1.2% year over year to $372.5 million. It accounted for nearly 47.6% of net sales. On a constant currency basis, Flavors revenues rose 4% year over year.The Fragrances business generated $410.8 million in revenues, up 3.3% year over year. It represented 52.4% of net sales in the quarter. On a constant currency basis, revenues grew 8% year over year.MarginsIn the quarter, International Flavors & Fragrances’ adjusted gross profit increased 4.3% year over year. Gross margin in the quarter was 46.1% versus 44.7% in the year-ago quarter. Research and development expenses, as a percentage of sales, inched down 10 basis points (bps) to 8.1%; while selling and administrative expense declined 40 bps to 15.9%.Adjusted operating margin was 21.3% compared with 21% in the year-ago quarter. Interest expense grew 12.5% year over year to $12.5 million. Balance Sheet and Cash FlowExiting first-quarter 2016, International Flavors & Fragrances’ cash and cash equivalents increased significantly to $528.9 million from $182 million in the preceding quarter. Long-term debt soared 46.1% sequentially to $1,370 million.In the quarter, International Flavors & Fragrances generated net cash of $31.6 million from its operating activities, slightly above the year-ago tally of $31.5 million. Capital spending amounted to $22.5 million, up from $19.4 million spent in first-quarter 2015.During the quarter, International Flavors & Fragrances paid cash dividends of $44.8 million to its shareholders; while using $40 million for purchase of treasury stocks.OutlookFor 2016, International Flavors & Fragrances expects net sales, on a currency neutral basis, to grow roughly 3.5−4.5%. Adjusted operating profit is likely to grow within 5−7%; while adjusted earnings are predicted to grow in a 6.5−8.5% range. The above projections include 1.5% positive contribution from acquired assets.Adverse foreign currency movements are likely to negatively impact sales by 2% and both operating profit as well as earnings per share by 3%.With a market capitalization of $9.6 billion, International Flavors & Fragrances presently carries a Zacks Rank #2 (Buy). Other stocks worth considering in the chemical industry include Daqo New Energy Corp. DQ, KMG Chemicals Inc. KMG and American Vanguard Corp. AVD. While both Daqo New Energy and KMG Chemicals sport a Zacks Rank #1 (Strong Buy), American Vanguard carries a Zacks Rank #2 (Buy).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 AMER VANGUARD (AVD): Free Stock Analysis Report DAQO NEW ENERGY (DQ): Free Stock Analysis Report INTL F & F (IFF): Free Stock Analysis Report KMG CHEMICALS (KMG): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research