Philip Morris (PM) misses Q2 estimates, cuts full-year outlook

Summary

  • The New York-based cigarette maker’s stock declined 3 percent on Tuesday morning.
  • Philip Morris’s second quarter reported diluted EPS rose 11.2% but was below its expectation.
  • Full-year reported diluted EPS is now projected between US$5.76 and US$5.86.

Philip Morris International Inc. (NYSE: PM) stock declined over 3 percent on Tuesday morning as the company missed its second quarter reported diluted EPS estimate and slashed full-year forecast.

Second-quarter results

Philip Morris reported an 11.2 percent year-over-year growth in its second quarter reported diluted EPS to US$1.39. While reporting its first quarter results, the New York-based company had projected its second quarter reported diluted EPS in the range of US$1.50 to US$1.55.

Net earnings during the three months ended June 30 came in at US$2.30 billion, compared with US$2.05 billion in the year-ago quarter. Adjusted diluted EPS during the three months rose 21.7 percent to US$1.57.

Net revenues totaled US$7.59 billion, up 14.2 percent year over year. Adjusted net revenues in the quarter grew 11.6 percent on an organic basis. Revenue from smoke-free products represented 29 percent of its total adjusted net revenues.

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Source: Pixabay

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Full-year forecast

Philip Morris, which owns cigarette brands including Marlboro and Parliament, now expects its full-year reported diluted EPS in the range of US$5.76 to US$5.86, compared to the previous forecast between US$5.93 to US$6.03.

The revised guidance reflects the adverse impact of 14 cents from the reduction in net revenues for the Saudi Arabia customs assessments.

Meanwhile, adjusted EPS is projected in the range of US$5.97 to US$6.07. Earlier the company was expecting the adjusted EPS to be between US$5.95 and US$6.05.

Philip Morris anticipates its adjusted net revenue to grow between 6 percent and 7 percent on an organic basis, up from the previous expectation of 5 percent to 7 percent growth.

For the third quarter, the company targets reported diluted EPS in the range of US$1.50 to US$1.55.

Share performance

Philip Morris currently has a market cap of US$147.59 billion. The stock gained 14.39 percent this year. The shares were trading in the range of US$68.93 to US$100.95 during the last one year period. The company has a P/E ratio of 17.70.

As of 11:36 am ET, Philip Morris shares were trading at US$94.60, down 3.4 percent.

READ MORE: JP Morgan, Goldman Sachs start earnings season with strong Q2 results

Please note: The above constitutes a preliminary view and any interest in stocks/cryptocurrencies should be evaluated further from an investment point of view.

The reference data in this article has been partly sourced from Refinitiv.


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