International Flavors Earnings Beat Estimates in Q3, Sales Dip Y/Y

Core Insights - International Flavors & Fragrances Inc. (IFF) reported adjusted earnings of $1.05 per share for Q3 2025, exceeding the Zacks Consensus Estimate of $1.02 per share, marking a 1% increase from the previous year [1][10] - The company's net sales decreased by 7.9% year over year to $2.69 billion, but still surpassed the Zacks Consensus Estimate of $2.63 billion [2] - IFF's gross profit fell by 6.6% year over year to $983 million, with a gross margin of 36.5%, slightly up from 36% in the prior year [3] Financial Performance - The adjusted operating EBITDA for Q3 was $519 million, down 8.6% from $568 million in the prior year, with an adjusted operating EBITDA margin of 19.3% compared to 19.4% a year ago [4] - Research and development expenses rose by 7% year over year to $174 million, while selling and administrative expenses decreased by 15% to $421 million [3] Segment Performance - The Taste segment saw a 2.6% increase in net sales year over year to $635 million, exceeding estimates, with adjusted operating EBITDA rising by 3.2% to $128 million [5] - The Food Ingredients segment's net sales fell by 1.5% year over year to $830 million, but adjusted operating EBITDA increased by 20.5% to $106 million [6] - The Health & Bioscience segment reported sales of $577 million, a slight increase from the previous year, with adjusted operating EBITDA up by 0.7% to $150 million [7] - The Scent segment's sales grew by 6.4% year over year to $652 million, with adjusted operating EBITDA increasing by 7.1% to $135 million [8] Cash Flow and Balance Sheet - At the end of Q3 2025, IFF had cash and cash equivalents of $621 million, up from $469 million at the end of 2024, while long-term debt decreased to $4.74 billion from $7.56 billion [9] - The company generated $532 million in operating activities in the first nine months of fiscal 2025, down from $681 million in the prior-year period [9] Guidance - IFF reaffirmed its 2025 guidance, expecting sales between $10.6 billion and $10.9 billion, and adjusted EBITDA between $2 billion and $2.15 billion [11]