Sensient Technologies Reports Results for 2Q 2016

Sensient Technologies Corporation reported diluted earnings per share from continuing operations of 55 cents in this year’s second quarter compared to 64 cents in last year’s second quarter. Revenue was $360.8 million in this year’s second quarter, an increase of 4.3% compared to $346.0 million in the comparable period last year.
 
Operating income was $43.7 million in the second quarter of 2016 compared to $45.1 million in last year’s second quarter. Foreign currency translation impacted second quarter results, reducing reported revenue, operating income and earnings per share by approximately 2%.
 
For the six months ended June 30, 2016 and 2015, diluted earnings per share from continuing operations were $1.25 and $1.28, respectively. Revenue increased approximately 2% to $703.3 million in the first half of 2016, from $692.2 million in the first six months of 2015. Operating income was $91.2 million in the first half of 2016, effectively flat with the $91.5 million reported in the comparable period last year. Foreign currency translation impacted the first half results, reducing revenue, operating income and earnings per share by approximately 2.5%.
 
For the six months ended June 30, 2016 and 2015, adjusted earnings per share from continuing operations were $1.59 and $1.56, respectively. Adjusted operating income was $108.1 million in the first half of this year, compared to $109.1 million in the comparable period last year. Foreign currency translation reduced both adjusted operating income and adjusted earnings per share from continuing operations by approximately 3% in the first half of 2016.
 
Cash provided by operating activities was $54.7 million in the quarter and $100.8 million in the first six months of the year. Last year cash provided by operating activities was $46.3 million in the second quarter and $76.9 million in the first half of the year. 
 
“Sensient had a strong quarter, with solid profit growth at each of our operating segments,” said Paul Manning, chairman, president and CEO of Sensient Technologies. “The Color Group was led by strong performances from the Cosmetics and Food Colors businesses, and many of the businesses in the Flavors & Fragrances Group delivered solid results in the quarter. We are on track to meet our profit growth expectations in 2016.”
 
The Flavors & Fragrances Group reported second quarter revenue of $209.3 million, an increase of 2.3% from $204.6 million reported in last year’s second quarter. Segment operating income was $35.3 million compared to $32.5 million in the second quarter of 2015. Foreign currency translation reduced revenue and segment operating income by approximately 1% in the quarter. Several of the businesses in the Flavors & Fragrances Group delivered solid results in the quarter, including Fragrances, North America Savory Flavors, and the Beverage businesses in both North America and Europe.
 
The Flavors & Fragrances Group reported revenue of $407.7 million and $410.6 million in the first six months of 2016 and 2015, respectively. Segment operating income was $62.8 million in the first half of this year compared to $63.0 million in the first six months of 2015. Foreign currency translation reduced both revenue and segment operating income by approximately 2% in the first half of this year.
 
The Color Group reported revenue of $131.6 million in the quarter, an increase of 8.0% compared to $121.9 million in last year’s second quarter. Segment operating income increased 9.7% to $28.0 million in the second quarter compared to $25.5 million in the comparable period last year. Foreign currency translation reduced revenue by 2.6%, and segment operating income by 1.5% in the quarter. The Color Group’s performance was driven by strong results from the Cosmetics and Food Color businesses. The Cosmetics business reported double-digit growth for both revenue and operating income, and the Food Color business reported solid revenue and profit growth.
 
For the first half of 2016, the Color Group reported revenue of $257.6 million, an increase of 5.6% over $244.0 million reported in the first six months of 2015. Segment operating income increased 7.8%, to $55.8 million in the first six months of this year compared to $51.8 million in the comparable period last year. Foreign currency translation reduced revenue by 3.6% and segment operating income by 2.6% in the first half of 2016.
 
The Asia Pacific Group reported revenue of $31.8 million in the quarter compared to $29.7 million in the comparable period last year. Segment operating income was $6.1 million in both this year’s and last year’s second quarter. Revenue for the first six months of 2016 and 2015 was $61.5 million and $58.6 million, respectively. Segment operating income was $12.1 million in the first half of this year compared to $11.7 million in the first half of last year. In the second quarter, foreign currency translation reduced revenue by 3.1% and segment operating income by 3.6%. For the first half of the year, foreign currency translation reduced both revenue and segment operating income by approximately 5%.