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Why Is Philip Morris (PM) Up 11.5% Since the Last Earnings Report?
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A month has gone by since the last earnings report for Philip Morris International Inc (PM - Free Report) . Shares have added about 11.5% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Philip Morris Third Quarter Earnings Beat, Maintains 2016 View
Philip Morris International reported adjusted fourth-quarter 2016 earnings per share of $1.10, missing the Zacks Consensus Estimate of $1.11 by a penny. Additionally, earnings gained 36% compared with the prior-year quarter figure driven by higher sales.
Excluding an unfavorable currency impact of $0.13, earnings surged 52% year over year.
Revenues & Margins
Net revenue was up 9.1% (up 10.5% excluding currency) to $7.0 billion, outpacing the Zacks Consensus Estimate of $6.39 billion. The sales gain is attributable to higher sales in Asia and European Union region. However, the increase was partially offset by lower sales in the tobacco category, stemming from the shift of customer preference away from tobacco products. Cigarette shipment volumes fell 4.4% to 2.1 billion units, primarily due to a decline in total market share.
Philip Morris’ market share of cigarettes increased in a number of markets, including Brazil, Canada, the Czech Republic, France, Kazakhstan, Korea, Kuwait, Mexico, the Netherlands, Norway, Poland, Saudi Arabia, Switzerland, Turkey and the United Arab Emirates.
The company's gross profit gained 11.3% year over year at $4.5 billion as higher excise tax and cost of sales were neutralized by increased revenues. Operating income gained 37.4% year over year to $4.6 billion due to lower marketing, administration and research costs.
Segment Details
Net revenue in the European Union region remained almost flat year over year to $1.9 billion. Excluding the impact of currency, net revenue inched up 1.8%, primarily due to favorable pricing in Germany, Spain and Italy.
Cigarette shipment volumes declined 4.3% to 45.2 billion units.
Market share in the region increased 0.4 percentage points (pp) as the increase in Marlboro’s market share was offset by the decrease in overall cigarette market share.
Net revenue in the Eastern Europe, the Middle East & Africa (EMEA) region gained 4.7% year over year to $1.8 billion. Excluding the impact of currency net revenue gained 9.7%, primarily owing to unfavorable pricing in Russia and North Africa.
Shipment volumes decreased 20% to 8.1 billion units, chiefly due to unfavorable pricing in North Africa and Russia.
The company recorded net revenue from Asia of $2.4 billion, up 27.4% (up 21.2% excluding currency) from the prior-year quarter, neutralized by unfavorable volume/mix, mainly in Australia.
Shipment volumes of 27 billion units decreased 4% due to reduced demand in Japan.
In Latin America and Canada, revenues declined 4.5% (up 7.4% excluding currency) to $785 million. Revenues (in terms of constant currency) increased year over year mainly in Argentina owing to the impact of excise tax-driven price increases.
Shipment volumes of 7.1 billion units dropped 18% year over year due to lower volumes in Argentina.
Fiscal Results
Adjusted 2016 earnings per share of $4.5 came in line with the Zacks Consensus Estimate. Earnings gained 1.4% from the prior-year quarter figure driven by higher sales.
Excluding an unfavorable currency impact of $0.46, earnings were up 12% year over year.
Net revenue edged down 0.4% (up 11.8% excluding currency) to $26.7 billion and came in line with the Zacks Consensus Estimate of $6.39 billion.
Financial Update
During the 2016, Philip Morris raised the regular quarterly dividend by 2.0% to annualized rate of $4.16 per common share.
Philip Morris exited the quarter with cash and cash equivalents of $4.23 billion compared with $4.99 billion in third-quarter 2016. Long-term debt was $25.85 billion in the third quarter compared with $29.69 billion in the previous quarter.
Guidance
For 2017, management expects its GAAP-earnings to be in the range of $4.70–$4.85, compared with $4.48 in 2016. Excluding an unfavorable currency impact, the reported diluted earnings per share range represents a projected increase of approximately 9% to 12% compared with adjusted diluted earnings per share of $4.48 in 2016.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.
Philip Morris International Inc Price and Consensus
At this time, Philip Morris' stock has a strong score of 'A' on both growth and momentum front. However, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregte VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is suitable for both growth and momentum investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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Why Is Philip Morris (PM) Up 11.5% Since the Last Earnings Report?
A month has gone by since the last earnings report for Philip Morris International Inc (PM - Free Report) . Shares have added about 11.5% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Philip Morris Third Quarter Earnings Beat, Maintains 2016 View
Philip Morris International reported adjusted fourth-quarter 2016 earnings per share of $1.10, missing the Zacks Consensus Estimate of $1.11 by a penny. Additionally, earnings gained 36% compared with the prior-year quarter figure driven by higher sales.
Excluding an unfavorable currency impact of $0.13, earnings surged 52% year over year.
Revenues & Margins
Net revenue was up 9.1% (up 10.5% excluding currency) to $7.0 billion, outpacing the Zacks Consensus Estimate of $6.39 billion. The sales gain is attributable to higher sales in Asia and European Union region. However, the increase was partially offset by lower sales in the tobacco category, stemming from the shift of customer preference away from tobacco products. Cigarette shipment volumes fell 4.4% to 2.1 billion units, primarily due to a decline in total market share.
Philip Morris’ market share of cigarettes increased in a number of markets, including Brazil, Canada, the Czech Republic, France, Kazakhstan, Korea, Kuwait, Mexico, the Netherlands, Norway, Poland, Saudi Arabia, Switzerland, Turkey and the United Arab Emirates.
The company's gross profit gained 11.3% year over year at $4.5 billion as higher excise tax and cost of sales were neutralized by increased revenues. Operating income gained 37.4% year over year to $4.6 billion due to lower marketing, administration and research costs.
Segment Details
Net revenue in the European Union region remained almost flat year over year to $1.9 billion. Excluding the impact of currency, net revenue inched up 1.8%, primarily due to favorable pricing in Germany, Spain and Italy.
Cigarette shipment volumes declined 4.3% to 45.2 billion units.
Market share in the region increased 0.4 percentage points (pp) as the increase in Marlboro’s market share was offset by the decrease in overall cigarette market share.
Net revenue in the Eastern Europe, the Middle East & Africa (EMEA) region gained 4.7% year over year to $1.8 billion. Excluding the impact of currency net revenue gained 9.7%, primarily owing to unfavorable pricing in Russia and North Africa.
Shipment volumes decreased 20% to 8.1 billion units, chiefly due to unfavorable pricing in North Africa and Russia.
The company recorded net revenue from Asia of $2.4 billion, up 27.4% (up 21.2% excluding currency) from the prior-year quarter, neutralized by unfavorable volume/mix, mainly in Australia.
Shipment volumes of 27 billion units decreased 4% due to reduced demand in Japan.
In Latin America and Canada, revenues declined 4.5% (up 7.4% excluding currency) to $785 million. Revenues (in terms of constant currency) increased year over year mainly in Argentina owing to the impact of excise tax-driven price increases.
Shipment volumes of 7.1 billion units dropped 18% year over year due to lower volumes in Argentina.
Fiscal Results
Adjusted 2016 earnings per share of $4.5 came in line with the Zacks Consensus Estimate. Earnings gained 1.4% from the prior-year quarter figure driven by higher sales.
Excluding an unfavorable currency impact of $0.46, earnings were up 12% year over year.
Net revenue edged down 0.4% (up 11.8% excluding currency) to $26.7 billion and came in line with the Zacks Consensus Estimate of $6.39 billion.
Financial Update
During the 2016, Philip Morris raised the regular quarterly dividend by 2.0% to annualized rate of $4.16 per common share.
Philip Morris exited the quarter with cash and cash equivalents of $4.23 billion compared with $4.99 billion in third-quarter 2016. Long-term debt was $25.85 billion in the third quarter compared with $29.69 billion in the previous quarter.
Guidance
For 2017, management expects its GAAP-earnings to be in the range of $4.70–$4.85, compared with $4.48 in 2016. Excluding an unfavorable currency impact, the reported diluted earnings per share range represents a projected increase of approximately 9% to 12% compared with adjusted diluted earnings per share of $4.48 in 2016.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.
Philip Morris International Inc Price and Consensus
Philip Morris International Inc Price and Consensus | Philip Morris International Inc Quote
VGM Scores
At this time, Philip Morris' stock has a strong score of 'A' on both growth and momentum front. However, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregte VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is suitable for both growth and momentum investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.