Philip Morris International Inc. (NYSE: PM) reported first-quarter 2017 results before markets opened on Thursday. The tobacco products firm posted adjusted diluted earnings per share (EPS) of $0.98 on revenue of $6.06 billion. In the same period a year ago, the company reported EPS of $0.98 on $6.08 billion in revenues. Reported revenue is net of excise taxes. Consensus estimates called for EPS of $1.03 and revenue of $6.47 billion.
Total product shipments dropped by 9.4% in the quarter and cigarette volume dropped 11.5% year over year in the quarter.
Currency translation effects cost the company $120 million in first-quarter revenues. Adjusted operating income totaled $2.49 billion, down 2.2% year over year.
The company raised its 2017 diluted EPS guidance to a range of $4.84 to $4.99, which excludes foreign exchange effects and a favorable tax item of $0.04 per share recorded in the first quarter.
The consensus estimate had called for full-year EPS of $4.88 on revenues of $28.52 billion. For the second quarter, analysts forecast EPS of $1.23 and revenues of $7.05 billion.
CEO André Calantzopoulos said:
Our results were in line with our previously communicated expectation of a relatively weak first quarter, due to lower cigarette volume — primarily related to low-price brands in specific markets where the impact on our profitability was limited — and certain timing factors. … We anticipate a combined cigarette and heated tobacco unit volume decline of 3% to 4% for the full year. It is extremely encouraging that already today, despite persistent capacity constraints, 1.8 million consumers have effectively stopped smoking and have switched to our heat-not-burn alternative, IQOS.
Philip Morris paid its regular dividend of $1.04 for the quarter. That translates to a dividend yield of 3.63% at Wednesday’s closing price. The company did not report any share repurchases for the first quarter.
The company’s shares traded down about 2.1% at $111.50 early Thursday morning. The stock’s 52-week range is $86.78 to $115.63. The 12-month consensus price target was $115.53 before this report.