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Philip Morris Expects Lower Currency Woes, Raises FY View
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Tobacco giant, Philip Morris International Inc. (PM - Free Report) has raised 2017 earnings guidance anticipating lower currency headwind for the year.
In an investor conference held on Feb 22, 2017, the Marlboro maker stated that it expects full-year reported earnings per share to be in the range of $4.80–$4.95, compared with a range of $4.70–$4.85 expected earlier during the fourth quarter conference call. The guidance represents a projected increase of approximately 9–12% compared with adjusted diluted earnings per share of $4.48 in 2016.
The increased guidance reflects lower currency headwind of 8 cents per share for full-year 2017, compared with unfavorable currency of 18 cents per share expected previously.
The improved condition of currency is expected to boost the company’s profits. Further, improved volumes, positive pricing, strong brand portfolio, and product innovation have been providing a boost to the company's results in the past few quarters. Further, Philip Morris is focusing on augmenting its unconventional tobacco products. The company has entered into a strategic agreement with Altria Group, Inc. (MO - Free Report) , according to which it will market Altria’s MarkTen e-cigarettes internationally, while Altria will distribute two of Philip Morris’ heated tobacco products in the U.S. Further, the companies have decided to partner on a regulatory engagement related to the products. The companies will also work on gaining shares as well as improving existing versions for the products.
Further, in Dec 7, 2016, it filed an application with the U.S. Food and Drug Administration (FDA) for its IQOS products (Heatsticks that heat tobacco instead of burning it). Moreover, once the Modified Risk Tobacco Product (MRTP) claim is approved by FDA, the company will be able to enjoy a significant marketing advantage over other reduced risk tobacco products that are being sold currently.
However, declining volumes and anti tobacco regulations globally are denting its results. The company has missed estimates in three of the trailing four quarters with average negative surprise of 3.99%.
Shares of the company gained 13.6% in the past one year, underperforming the Zacks categorized Tobacco industry which witnessed an increase of 17% during the same period.
Zacks Rank and Other Stock Picks
Philip Morris currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the consumer staples sector worth considering include,
Pinnacle Foods Inc. carrying a Zacks Rank #2 and has an expected earnings growth rate of 8.3%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? Last year's market-beating Top 10 portfolio produced 5 double-digit winners. For example, oil and natural gas giant Pioneer Natural Resources and First Republic Bank racked up stellar gains of +44.9% and +44.3% respectively. Now a brand-new list for 2017 has been hand-picked from 4,400 companies covered by the Zacks Rank. See the 2017 Top 10 right now>>
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Philip Morris Expects Lower Currency Woes, Raises FY View
Tobacco giant, Philip Morris International Inc. (PM - Free Report) has raised 2017 earnings guidance anticipating lower currency headwind for the year.
In an investor conference held on Feb 22, 2017, the Marlboro maker stated that it expects full-year reported earnings per share to be in the range of $4.80–$4.95, compared with a range of $4.70–$4.85 expected earlier during the fourth quarter conference call. The guidance represents a projected increase of approximately 9–12% compared with adjusted diluted earnings per share of $4.48 in 2016.
The increased guidance reflects lower currency headwind of 8 cents per share for full-year 2017, compared with unfavorable currency of 18 cents per share expected previously.
The improved condition of currency is expected to boost the company’s profits. Further, improved volumes, positive pricing, strong brand portfolio, and product innovation have been providing a boost to the company's results in the past few quarters. Further, Philip Morris is focusing on augmenting its unconventional tobacco products. The company has entered into a strategic agreement with Altria Group, Inc. (MO - Free Report) , according to which it will market Altria’s MarkTen e-cigarettes internationally, while Altria will distribute two of Philip Morris’ heated tobacco products in the U.S. Further, the companies have decided to partner on a regulatory engagement related to the products. The companies will also work on gaining shares as well as improving existing versions for the products.
Further, in Dec 7, 2016, it filed an application with the U.S. Food and Drug Administration (FDA) for its IQOS products (Heatsticks that heat tobacco instead of burning it). Moreover, once the Modified Risk Tobacco Product (MRTP) claim is approved by FDA, the company will be able to enjoy a significant marketing advantage over other reduced risk tobacco products that are being sold currently.
However, declining volumes and anti tobacco regulations globally are denting its results. The company has missed estimates in three of the trailing four quarters with average negative surprise of 3.99%.
Shares of the company gained 13.6% in the past one year, underperforming the Zacks categorized Tobacco industry which witnessed an increase of 17% during the same period.
Zacks Rank and Other Stock Picks
Philip Morris currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the consumer staples sector worth considering include,
Helen of Troy Limited (HELE - Free Report) carrying a Zacks Rank #2 (Buy) and has an expected earnings growth rate of 10.8%. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Pinnacle Foods Inc. carrying a Zacks Rank #2 and has an expected earnings growth rate of 8.3%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? Last year's market-beating Top 10 portfolio produced 5 double-digit winners. For example, oil and natural gas giant Pioneer Natural Resources and First Republic Bank racked up stellar gains of +44.9% and +44.3% respectively. Now a brand-new list for 2017 has been hand-picked from 4,400 companies covered by the Zacks Rank. See the 2017 Top 10 right now>>