Sensient Technologies (SXT) Reports In-Line Q4 EPS

Sensient Technologies (NYSE: SXT) reported Q4 EPS of $0.79, in-line with the analyst estimate of $0.79. Revenue for the quarter came in at $324.6 million versus the consensus estimate of $344 million.

Expectations for consolidated operating income and EPS in 2019 are tempered by several headwinds the Company faces relative to 2018 adjusted EPS. These headwinds are non-cash share based compensation and income taxes. The Company’s compensation program features strong ties to performance, particularly in the executive team’s stock based compensation, which is 100% performance based. As a result of this pay philosophy, the Company recorded an unusually low level of non-cash stock based compensation expense in 2018 to reflect lower than expected payouts on equity grants to the executive team. Also in 2018, the Company’s adjusted tax rate was reduced by a number of proactive planning opportunities which may not recur in 2019.

As a result of the headwinds above, the Company expects local currency 2019 earnings per share to be down 8% to 11% in comparison to 2018 reported earnings per share of $3.70 and down 4% to 7% in comparison to 2018 adjusted EPS of $3.55. In addition, we expect earnings per share reported on a U.S. dollar basis to be impacted by currency headwinds of approximately five cents, or 1% to 2%, based on current exchange rates. Since consolidated local currency Adjusted EBITDA(2) will not be impacted by these headwinds, the Company expects this metric to grow at a rate in excess of consolidated operating income and earnings per share. The Company expects consolidated Adjusted EBITDA to grow at a mid-single digit rate in 2019 on a local currency basis.

For earnings history and earnings-related data on Sensient Technologies (SXT) click here.

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