Colors, flavors and fragrances manufacturer Sensient Technologies Corp. (SXT) Friday reported a decline in profit for the third quarter, hurt mainly by lower revenues. Results for the quarter also trailed Street's expectations. In the morning trade, the company's stock is down about 8%.
For the quarter, the Milwaukee, Wisconsin-based company's net earnings were $22.83 million or $0.47 per share, compared to $24.10 million or $0.50 per share in the prior-year period. On an average, five analysts polled by Thomson Reuters expected the company to earn $0.50 per share for the quarter. Analysts' estimates typically exclude special items.
Sensient said its third quarter earnings, as stated in local currency, would be nearly 3 cents per share higher than reported earnings and even with the previous year.
Revenues for the period slipped 4.8% to $303.18 million from $318.60 million in the third quarter of fiscal 2008. Sensient attributed the decrease to the impact of foreign currency translation which reduced revenues by 4.2%. Analysts expected the company to generate revenues of $315.95 million for the quarter.
On a local currency basis, Sensient stated that revenues were down nearly 1% from the 2008-year period.
On a segmental basis, revenues from flavors and fragrances were $194.81 million as against $204.55 million last year. Color segment generated revenues of $94.16 million versus $102.66 million a year ago. However, revenues from corporate and other divisions increased to $23.29 million from $21.57 million in the last-year period.
Chairman and chief executive officer Kenneth Manning said, "We saw strength this quarter in a number of markets, but overall results continue to be impacted by soft economic conditions."
For the nine-month period, Sensient's net earnings rose slightly to $70.26 million from $70.24 million in the comparable period prior year. However, on a per share basis, earnings slipped to $1.45 per share from $1.46 per share on higher share count. Year-to-date revenues were $889.96 million, compared with $958.82 million in the previous year, reflecting the impact of foreign currency translation which brought down revenues by 7.3%. Revenues in local currency for the period were in line with same period last year, the company noted.
Looking ahead, Sensient currently expects 2009 earnings to be in the range of $1.85 to $1.90 per share as against its previous view of between $1.90 per share and $1.95 per share. Analysts foresee the company to earn $1.97 per share for the full year.
SXT is currently trading at $26.82 per share, down 7.74%, on the New York Stock Exchange.
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