International Flavors & Fragrances Inc. (IFF) reported Wednesday a decline in second-quarter profit, hurt by 11% decrease in sales. On a per share basis, adjusted earnings came in above analysts' estimate by three cents.
For the second quarter, net income dropped to $48.08 million or $0.60 per share from $67.03 million or $0.83 per share in the previous year. The results of the latest quarter included a $0.05 per share expense relating to restructuring and employee separation costs. The prior-year results included a benefit of $0.02 per share from favorable tax settlements net of employee separation costs.
Excluding items, earnings were $0.65 a share, compared to $0.81 a share in the year-ago period. On average, six analysts polled by Thomson Reuters expected the company to report earnings of $0.62 per share in the second quarter. Analysts' estimates typically exclude special items.
Net sales for the period decreased 11% to $568.26 million from $636.13 million in the second quarter of the prior fiscal year. Four analysts were expecting revenue of $583.62 million in the second quarter. On a constant currency basis, revenue declined 4%.
Flavor sales were $269.77 million, down 7% from $289.79 million, hurt by a stronger U.S. Dollar. Fragrance sales dipped year-over-year to $298.49 million from $346.33 million, as beauty care sales continued to be hurt by sharp fall in retail consumption and supply chain contraction in the Fine Fragrance and Fragrance Ingredients businesses.
Research and development costs declined 13% to $48.76 million from $56.17 million, while selling and administrative expenses fell 11% to $93.01 million from $104.66 million in the year-ago quarter.
For the first half of fiscal 2009, net income dropped to $95.28 million or $1.20 per share from $122.97 million or $1.52 per share in the comparable quarter last year. Adjusted earnings slid to $1.25 a share from $1.51 a share. Sales came down 9% to $1.13 billion from $1.23 billion in the second quarter of 2008.
IFF closed Tuesday's regular trading hours at $36.42 on the NYSE.
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