Sensient Technologies Corporation Announces Q1 2024 Financial Results and Upgrades Full Year Outlook

Sensient Technologies Corporation (NYSE: SXT), a prominent provider of flavors and colors for the food, pharmaceutical, and personal care industries, has disclosed its financial performance for the first quarter ending on March 31, 2024. Here are the key highlights:

First Quarter Consolidated Results:

  • Total revenue rose by 4.2% to $384.7 million compared to $369.0 million in the same period last year. On a local currency basis, revenue saw a 3.8% increase.
  • Operating income decreased by 2.8% to $49.4 million from $50.8 million recorded in the first quarter of 2023. The company attributed this decrease to $2.8 million in costs related to its recently implemented Portfolio Optimization Plan. However, when adjusted for local currency fluctuations, operating income and EBITDA increased by 2.6% and 2.2%, respectively.
  • Diluted earnings per share dropped by 8.8% to 73 cents in the first quarter of 2024, down from 80 cents in the same quarter of 2023. The decline in adjusted EPS (1.3%) primarily stemmed from higher interest expenses and an increased tax rate.

Company Statement: Paul Manning, Chairman, President, and CEO of Sensient, expressed satisfaction with the company’s performance, citing a strong underlying business and successful new sales endeavors. He expressed confidence in the team’s ability to execute the company’s strategy and meet expectations for 2024.

Performance by Business Segment:

  • Flavors & Extracts Group: Reported revenue of $193.1 million, marking a $14.2 million increase over the prior year’s first quarter. This growth was driven by higher volumes, favorable pricing, and exchange rates. Segment operating income also saw a rise to $23.7 million.
  • Color Group: Recorded revenue of $160.0 million, a slight decrease of $1.1 million compared to the previous year. Lower volumes in the food and pharmaceutical product lines, attributed to market declines and modest customer destocking, impacted revenue. Segment operating income was $31.7 million, a decrease of $0.2 million from the prior year.
  • Asia Pacific Group: Achieved revenue of $40.3 million, up $0.2 million from the same period last year, driven by higher volumes despite unfavorable exchange rates. However, segment operating income decreased to $8.8 million, primarily due to increased input costs and adverse exchange rates.

Corporate & Other:

  • Operating expenses amounted to $14.7 million in the first quarter of 2024, compared to $12.5 million in the prior year. The increase was primarily due to the inclusion of $2.8 million in costs related to the Portfolio Optimization Plan. Adjusted operating expenses for Corporate & Other decreased by $0.6 million compared to the previous year’s first quarter.

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