May 10 - International Flavors and Fragrances Inc posted a higher-than-expected quarterly profit on Tuesday and said it believes it can reach its goal of full-year 2011 earnings, increasing by more than 10 percent despite growing raw material costs.

IFF supplies flavour and fragrance ingredients to manufacturers around the world

The first-quarter performance, driven by strong sales of food additives in emerging markets, helped send the company's shares up to an all-time high of $66.23 in early trading. They retreated later and were up 2.5 percent at $65.34 in afternoon trading on the New York Stock Exchange.

"We are optimistic that our performance in the first quarter, coupled with the opportunities we see throughout the remainder of the year, give us the confidence to achieve our long-term targets," Chairman and Chief Executive Officer Doug Tough told Wall Street analysts on a conference call.

International Flavors and Fragrances targeted local currency sales growth of 4 percent to 6 percent this year, he said. Operating profit is expected to grow by 7 percent to 9 percent and earnings per share should expand by 10 percent or more, Tough said.

While first-quarter raw material costs rose by 4 percent and were continuing to go up, he said the company was "cautiously optimistic" its price increases in the second half of the year will mitigate the cost increases.

Last month, IFF's competitor, Swiss-based Givaudan, the world's biggest fragrance and flavor maker, said it was raising prices to help it pass on growing costs of raw materials such as oil-based chemicals.

IFF, which has been creating flavors and fragrances for more than 170 years, works with leading global brands to develop scents and tastes for products that are household names. It is a leading supplier for Procter & Gamble.

It said first-quarter revenue growth was fueled by double-digit growth in the emerging markets, while strong demand for health offerings boosted sales growth in developing markets.

Net income was $84.0 million, or $1.03 per share, compared with $63.8 million, or 80 cents per share, in the year-ago period. Analysts expected earnings of 94 cents per share, according to Thomson Reuters I/B/E/S.

Revenue rose 9 percent to $714.3 million. Analysts expected $683.9 million.

(Reporting by Ernest Scheyder, additional reporting by Anna Driver in Houston and Steve James in New York; editing by Dave Zimmerman, Maureen Bavdek and Gunna Dickson)