US market knocks Sensient results

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Slacker US sales across all sectors hit third quarter results for
US Sensient Technologies with the colour and flavours company this
week reporting a slide in operating income.

Slacker US sales across all sectors hit third quarter results for US Sensient Technologies with the colour and flavours company this week reporting a slide in operating income.

For the quarter ended 30 September 2003 the group saw operating income for the period slipping 7.6 per cent from $36,935 in 2002 to $34,122 (€29,500, despite a 3.9 per cent rise in revenue from $237,995 to $247,288.

The Milwaukee-based company said net income rose to $20.7 million, or 44 cents per share, in the third quarter versus $20.2 million, or 42 cents per share, in the comparable quarter in 2002.

"Although we reported our eighth consecutive quarterly increase in revenue and EPS, we see some difficult market conditions, particularly in the United States,"​ said Kenneth P. Manning, chairman, president and CEO of Sensient Technologies​. "The U.S. market for food and beverage continues to be weak even though our overseas markets show improvement."

A disappointing turn out from the US was particularly evident in the colours division where revenue fell by 2 per cent to $87,489, down from $89,236. Operating income took a massive dive of 17.1 per cent, plunging from $21,251 for the third quarter of 2002 to $17,608 for the same period in 2003.

'Colour group revenue and operating income for the quarter were impacted by reduced US demand for food and beverage colours, although sales of cosmetic colours and of natural colours in Europe showed strong gains,'​ said the company in a statement this week.

For flavours and fragrances a slightly brighter picture, although far from dazzling. Operating income rose 4.3 per cent for the third quarter to $21,594, up from $20,703 for the same period last year and revenue crept up by 3.2 per cent from $144,865 for the quarter in 2002 to $149,481 in 2003.

On the back of the results, Sensient said it expects diluted earnings per share to be $1.78 and diluted earnings per share for the fourth quarter 2003 in the range of 45 cents.

Earlier this year Indian producers of the synthetic red colouring allura red won an antidumping case in the US when the United States International Trade Commission ruled in their favour. The case was opened in March when Sensient Technologies filed a petition with the commission alleging that imports from India of the colouring were subsidised by the Indian government and sold at a 'less than fair value'.

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