Operating income was $24.0 million in the first quarter of 2017 and $47.5 million in last year’s first quarter. Foreign currency translation reduced revenue, operating income, and earnings per share each by approximately 1% in the first quarter.
Sensient’s adjusted earnings per share increased approximately 9% to 82 cents in this year’s first quarter, compared to 75 cents in the first quarter of 2016. Adjusted operating income increased approximately 9% in the first quarter, to $55.3 million from $50.9 million in last year’s first quarter.
Cash provided by operating activities was $37.6 million in this year’s first quarter and $46.2 million in the first quarter of 2016. Cash flow in this year’s first quarter was impacted by a smaller inventory reduction in the US Natural Ingredients business and higher incentive payments compared to cash flow in last year’s first quarter.
“The company had a very good first quarter,” said Paul Manning, chairman, president and CEO of Sensient Technologies. “The Color Group continues to deliver strong results, led by the Cosmetics and Food Colors businesses. The Flavors and Fragrances Group delivered solid operating income growth and improved its operating margin by 150 basis points. The first quarter results were in line with my expectations, and I remain optimistic about the company’s future.”
The Color Group reported revenue of $134.1 million in the quarter and $126.5 million in last year’s first quarter, an increase of 6.0%. Operating income increased 7.5% to $30.2 million in the quarter. The Group’s first quarter results were driven by the Cosmetics and Food Color businesses, which delivered strong revenue and profit growth in the quarter. In addition, the Pharma and Inks businesses each delivered solid profit growth in the first quarter.
The Flavors & Fragrances Group reported revenue of $186.9 million and $198.5 million in the first quarters of 2017 and 2016, respectively. Operating income increased approximately 4% to $28.8 million, from $27.6 million in last year’s first quarter. The Flavors & Fragrances Group’s operating margin increased 150 basis points to 15.4% in the quarter, which is the fourth consecutive quarter that the Group has improved its year-over-year operating margin by at least 100 basis points.
The Asia Pacific Group reported revenue of $29.6 million and $28.2 million in the first quarters of 2017 and 2016, respectively. Operating income was $5.2 million in the quarter, off approximately 8% from last year’s first quarter result of $5.6 million.
Corporate & Other, which includes the restructuring and other costs, reported operating costs of $40.1 million in this year’s first quarter and $13.8 million in the first quarter of 2016.
Sensient has updated its guidance for 2017 earnings per share from continuing operations to be between $2.54 and $2.64, which includes an estimated 81 cents of restructuring and other costs. The restructuring and other costs are primarily non-cash charges related to divestitures. The company’s previous guidance had been between $2.76 and $2.86, which included 59 cents of restructuring and other costs.