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International Flavors & Fragrances (IFF) Q1 Earnings Peek

International Flavors & Fragrances Inc. IFF is scheduled to report first-quarter 2016 results on May 9, after the market closes. The Zacks Consensus Estimate for the quarter is pegged at $1.41.

The company outperformed estimates in three of the four trailing quarters, and lagged in one with an average negative earnings surprise of 0.72%.

Last quarter, International Flavors & Fragrances’ earnings of $1.05 per share came in below the Zacks Consensus Estimate of $1.15 by 8.7%. Let us see how things are shaping up for this quarter.

Factors to Affect Q1 Results

We believe that International Flavors & Fragrances is not immune to the risks arising from uncertain global economic conditions and adverse movements of foreign currencies. For 2016, the company expects adverse foreign currency movements to reduce revenues by 2.5% and earnings per share by 5%.

In addition, stiff competition in the industry might impede the company’s growth momentum. To add to its woes, the company is exposed to risks arising from disruptions in supply or quality of ingredients as well as rising prices.

However, we believe the negative impacts of these headwinds will be partially offset by the company’s growth strategies for the near term. The company is constantly striving to expand its product portfolio through innovation as well as acquisitions of other important businesses. Also, business expansion in emerging markets and rewarding shareholders handsomely through dividend payments and share buybacks remain priorities for International Flavors & Fragrances.

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 (Strong Buy), #2 (Buy) or #3 (Hold) 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 0.00%, with both the Most Accurate estimate and the Zacks Consensus Estimate standing at $1.41.

Zacks Rank: International Flavors & Fragrances currently carries a Zacks Rank #2 (Buy), which when combined with a 0.00% Earnings ESP, makes surprise prediction difficult.

Note that we caution against stocks with Zacks Rank #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies that you may want to consider instead as our model shows they have the right combination of elements to post an earnings beat this quarter:  

Kraton Performance Polymers Inc. KRA, with an Earnings ESP of +9.72% and a Zacks Rank #3.

Landec Corp. LNDC, with an Earnings ESP of +6.67% and a Zacks Rank #3.

Green Plains Inc. GPRE, with an Earnings ESP of +41.67% and a Zacks Rank #3.

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KRATON PERFORM (KRA): Free Stock Analysis Report
 
LANDEC CORP (LNDC): Free Stock Analysis Report
 
INTL F & F (IFF): Free Stock Analysis Report
 
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