Sensient Technologies Corporation (NYSE: SXT), a prominent provider of flavors and colors for the food, pharmaceutical, and personal care industries, has announced its financial performance for the first quarter ending March 31, 2024.
In the first quarter of 2024, reported revenue surged to $384.7 million, marking a 4.2% increase compared to the previous year’s first quarter revenue of $369.0 million. Adjusted for local currency fluctuations, revenue rose by 3.8%.
However, reported operating income experienced a slight decline, dropping by 2.8% to $49.4 million from $50.8 million recorded in the first quarter of 2023. This decrease can be attributed to the $2.8 million costs associated with the recently implemented Portfolio Optimization Plan. Nevertheless, after adjusting for local currency effects, both operating income and EBITDA increased by 2.6% and 2.2% respectively, demonstrating underlying operational strength.
Reported diluted earnings per share also saw a decline of 8.8%, falling to 73 cents in the first quarter of 2024 from 80 cents in the same period last year. Adjusted for local currency, EPS decreased by 1.3%, primarily due to higher interest expenses and an increased tax rate.
Paul Manning, Chairman, President, and CEO of Sensient, expressed satisfaction with the company’s performance, citing strong underlying business and successful sales initiatives as drivers for optimism in 2024. Manning expressed confidence in the company’s ability to execute its strategic plans and meet expectations for the year.
The Flavors & Extracts Group reported a notable increase in revenue to $193.1 million, up $14.2 million from the previous year’s first quarter. This growth was attributed to higher volumes, favorable pricing, and exchange rates. Segment operating income for this group reached $23.7 million, representing an increase of $1.5 million compared to the prior year.
Conversely, the Color Group reported a slight decrease in revenue to $160.0 million in the first quarter of 2024, down by $1.1 million from the previous year. This decline was mainly due to reduced volumes in the food and pharmaceutical product lines, driven by market declines and customer destocking. Segment operating income for this group was $31.7 million, a decrease of $0.2 million compared to the previous year, primarily attributable to lower volumes in certain product lines.
The Asia Pacific Group saw a modest increase in revenue to $40.3 million, up by $0.2 million from the previous year. This growth was driven by higher volumes, partially offset by unfavorable exchange rates. Segment operating income for this group was $8.8 million, down by $0.5 million compared to the previous year, mainly due to higher input costs and currency fluctuations.
Corporate & Other reported operating expenses of $14.7 million in the first quarter of 2024, compared to $12.5 million in the same period last year. This increase was primarily attributed to the costs associated with the Portfolio Optimization Plan. Adjusted for local currency effects, operating expenses for Corporate & Other decreased by $0.6 million compared to the previous year.
In summary, Sensient Technologies Corporation has demonstrated overall resilience and growth in its key business segments despite facing challenges such as market declines and currency fluctuations. With a solid foundation and strategic initiatives in place, the company remains optimistic about its prospects for the remainder of 2024.
