Phillip Morris Second-Quarter Earnings Up in Smoke

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Phillip Morris International Inc. (NYSE: PM) released its most recent quarterly results before the markets opened on Thursday. The cigarette giant posted $1.14 in earnings per share (EPS) and $6.9 billion in revenue, compared with consensus estimates that called for $1.23 in EPS and $7.11 billion in revenue. The same period from last year had $1.15 in EPS and $6.65 billion in revenue.

During the second quarter, total cigarette and heated tobacco unit shipment volume was 199.9 billion, down by 5% from last year. This was mainly brought down by cigarette shipment volume that declined 7.5% to 193.5 billion units. Heated tobacco unit shipment volume was 6.4 billion units, up from 1.2 billion units in 2016.

The company revised its 2017 EPS forecast, although this is only reflecting currency as opposed to any shifts in the business. The company expects EPS to come in the range of $4.78 to $4.93, versus consensus estimates calling for $4.82 in EPS and $28.55 billion in revenue.

André Calantzopoulos, chief executive officer of Phillip Morris, commented:

“Our quarterly results were robust with, as expected, sequential improvement in our volume performance, as well as strong currency-neutral net revenue growth of 7% versus last year.”

He added:

“IQOS, our flagship smoke-free alternative, continues to perform exceptionally well, supported by further recent successful market launches, notably in Korea. In the quarter, shipments of Marlboro HeatSticks represented over 40% of our total shipments in Japan, where we recorded a national share of 10%. To date, more than 2.9 million adult consumers have already stopped smoking and switched to IQOS.”

Shares of Phillip Morris closed Wednesday at $121.62, with a consensus analyst price target of $123.71 and a 52-week range of $86.78 to $123.55. Following the release of the earnings report, the stock was down 3% at $117.80 in early trading indications Thursday.