Flavor manufacturer Sensient Technologies Corp. (SXT), Friday, reported a 20.9% drop in fourth-quarter earnings, hurt by a significant legal settlement charge included in the quarter. The company also provided guidance for the next fiscal year.
Net earnings for the fourth quarter declined to $16.31 million or $0.33 per share from $20.62 million or $0.43 per share for the prior-year quarter. After adjusting for a $11.3 million charge, which the company included in the quarter's results as cost for some proposed legal settlements, net income was $0.47 per share.
On average, four analysts polled by Thomson Reuters expected the company to report earnings of $0.45 per share. Analysts' estimates typically exclude special items.
Fourth-quarter net revenues grew 6% to $311.45 million from $293.81 million from the comparable period last year.
Segment-wise, revenue from Sensient's Flavors & Fragrances Group rose 2.3% to $195.96 million from $191.48 million and Color Group's sales increased 11.4% to $99.83 million from $89.59 million. Corporate and other revenues grew 27.5% to $25.23 million from $19.79 million.
For fiscal 2009, the company reported a 4.7% decrease in net earnings to $86.56 million or $1.78 per share from $90.86 million or $1.89 per share last year. Adjusted net earnings for the current fiscal was $1.92 per share, higher than the market estimate of $1.90 per share.
Full-year revenues dropped 4.1% to $1.20 billion from the previous year's $1.25 billion, which according to the company was the impact of foreign currency translation.
Looking forward, Sensient projects earnings in fiscal 2010 to be in the range of $1.98 to $2.05 per share, with growth likely to be weighted toward the second half of the year partly as a result of the timing of expected raw material cost reductions.
Three analysts are currently expecting the company to report earnings of $2.05 per share.
"Sensient's business has held up well throughout this year's difficult economic environment. Our strong cash flow and low debt levels have allowed us to continue to invest in our business, which will enhance our ability to grow in the future," said Kenneth Manning, Sensient Chairman and Chief Executive Officer.
SXT shares closed Thursday's regular trading at $25.99 on the NYSE.
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