Helped by climbing demand in emerging markets, International Flavors & Fragrances (NYSE:IFF) disclosed on Thursday a 17% increase in fourth-quarter profit, though investors booed the worse-than-expected results, sending its shares down more than 6% intraday.
The New York-based company posted net income of $55.6 million, or 68 cents a share, compared with $47.4 million, or 59 cents, in the same quarter last year.
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Excluding one-time items, including the company’s ongoing restructuring efforts in Europe, IFF earned 69 cents a share, narrowly missing average analyst estimates polled by Thomson Reuters of 74 cents.
Revenue for the flavor and fragrance creator, used in consumer products such as soft drunks, candies and perfumes, was $630 million, up 8% from $585.6 million a year ago, beating the Street’s view of $621.5 million.
“IFF had an outstanding year in 2010 led by strong new business wins across both flavors and fragrances,” said Doug Tough, the company’s chief executive, who attributed the performance to strong growth in emerging markets, increased levels of innovation and its product portfolio.
“This record top-line performance provided strong operational leverage that, when combined with our margin improvement initiatives, drove a substantial increase in operating profit and EPS,” he said.
The company’s flavor business saw an 11% increase in sales, led by higher volumes and new businesses in emerging markets, particularly Asia and Latin America.
Sales of fragrances surged 9%, led by fine fragrances and beauty care as well as functional fragrances in new businesses.