Sensient Beats, Guides Higher - Analyst Blog
19 Aprile 2011 - 1:15PM
Zacks
Sensient Technologies
Corporation’s (SXT) first quarter 2011 earnings of 53
cents per share surpassed the Zacks Consensus Estimate by a penny
and increased 10.4% from 48 cents posted in the prior-year quarter.
The better-than-expected results were attributable to strong
performance of the Color Group segment.
Total revenue jumped 11.3% year
over year to $349.7 million during the quarter. Total revenue was
also benefited by the favorable currency impact of 1%
Quarter
Highlights
In the reported quarter, the
specialty chemicals company experienced higher sales across all its
business segments.
Sales of the Color Group segment
rose 16.4% year over year to $125.7 million during the quarter,
driven by solid demand for food and beverage colors, particularly
natural colors. Operating income leaped 23.4% to $22.3 million.
Flavors & Fragrances Group
reported revenue of $206.7 million, up 8.4%, attributed to solid
volume gains in traditional flavors and dehydrated flavors.
Operating income spiked 6.5% to $29.0 million.
Operating income of the company
expanded 12.8% to $43.6 million due to higher sales volume. Selling
and administrative expenses and cost of products sold climbed 13.9%
and 10.4%, respectively.
Financial
Position
The Milwaukee, Wisconsin-based
company ended the quarter with cash flow from operations of $28.4
million, up 21.2% from the prior-year period. As of March 31, 2011,
long-term debt was $343.9 million, down from $373.7 million as of
March 31, 2010.
Outlook
The company raised its 2011
earnings guidance range to $2.28 to $2.34 from its previous
forecast of $2.26 to $2.32. The Zacks Consensus Estimate for 2011
is pegged at $2.33 per share.
Our Take
Based on better-than-expected
results and higher outlook, we expect estimates to go up in the
coming days. However, in the last 30 days estimates have not
budged, implying the lack of near-term catalysts.
Sensient holds a Zacks #2 Rank,
implying a short-term Buy rating. Besides, we are also maintaining
our long-term Neutral recommendation on the stock.
One of Sensient Technologies’
primary competitors, Arch Chemicals Inc. (ARJ) is
expected to announce its first quarter 2011 results on May 4,
2011.
ARCH CHEMICALS (ARJ): Free Stock Analysis Report
SENSIENT TECH (SXT): Free Stock Analysis Report
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