Stock Update (NYSE:PM): Philip Morris International Inc. Reports 2016 First-Quarter Results


Philip Morris International Inc. (NYSE:PM) announced its 2016 first-quarter results.

“In line with our expectations, our first-quarter financial results reflected a tough comparison with the exceptionally strong first quarter of last year,” said André Calantzopoulos, Chief Executive Officer.

“Today we raised our full-year guidance as a result of moderating currency headwinds, which continues to represent a currency-neutral adjusted diluted EPS growth rate of approximately 10% to 12% versus 2015. We expect the growth to be skewed towards the second half of this year, and the fourth quarter in particular.”

“Our confidence is guided by moderating industry volume declines and robust pricing, underpinned by our superior cigarette brand portfolio, led by our flagship brand, Marlboro. We are also excited by the progress, best represented by our impressiveHeatStick share momentum in Japan, of our Reduced-Risk Product, iQOS.”

2016 First-Quarter

  • Reported diluted earnings per share of $0.98, down by $0.18 or 15.5% versus $1.16 in 2015
    • Excluding unfavorable currency of $0.19, reported diluted earnings per share up by $0.01 or 0.9% versus $1.16 in 2015 as detailed in the attached Schedule 9
  • Adjusted diluted earnings per share of $0.98, down by $0.18 or 15.5% versus $1.16 in 2015
    • Excluding unfavorable currency of $0.19, adjusted diluted earnings per share up by $0.01 or 0.9% versus $1.16 in 2015 as detailed in the attached Schedule 8
  • Cigarette shipment volume of 196.0 billion units, down by 1.4% excluding acquisitions
  • Reported net revenues, excluding excise taxes, of $6.1 billion, down by 8.1%
    • Excluding unfavorable currency of $691 million and the impact of acquisitions, reported net revenues, excluding excise taxes, up by 2.4% as detailed in the attached Schedule 6
  • Reported operating companies income of $2.5 billion, down by 13.9%
    • Excluding unfavorable currency of $383 million and the impact of acquisitions, reported operating companies income down by 0.9% as detailed in the attached Schedule 6
  • Adjusted operating companies income, reflecting the items detailed in the attached Schedule 7, of $2.5 billion, down by 13.9%
    • Excluding unfavorable currency and the impact of acquisitions, adjusted operating companies income down by 0.9% as detailed in the attached Schedule 7
  • Reported operating income of $2.5 billion, down by 13.9%

2016 Full-Year Forecast

  • PMI increases its 2016 full-year reported diluted earnings per share forecast to be in a range of $4.40 to $4.50, at prevailing exchange rates, versus $4.42 in 2015. Excluding an unfavorable currency impact, at prevailing exchange rates, of approximately $0.45 for the full-year 2016, the reported diluted earnings per share range represents a projected increase of approximately 10% to 12% versus adjusted diluted earnings per share of $4.42 in 2015 as detailed in the attached Schedule 12
  • This forecast does not include any share repurchases in 2016
  • Estimates 2016 international cigarette volume, excluding the People’s Republic of China and the U.S., to decline by approximately 2.0% to 2.5%, in line with the estimated decline of 2.4% in 2015
  • This forecast excludes the impact of any future acquisitions, unanticipated asset impairment and exit cost charges, future changes in currency exchange rates, and any unusual events. Factors described in the Forward-Looking and Cautionary Statements section of this release represent continuing risks to these projections. (Original Source)

Shares of Philip Morris are down nearly 3% to $97.99 in pre-market trading. PM has a 1-year high of $102 and a 1-year low of $76.54. The stock’s 50-day moving average is $97.15 and its 200-day moving average is $89.06.

On the ratings front, PM has been the subject of a number of recent research reports. In a report issued on April 14, Goldman Sachs analyst Judy Hong reiterated a Hold rating on PM, with a price target of $100, which represents a slight downside potential from current levels. Separately, on April 4, Morgan Stanley’s Matthew Grainger reiterated a Buy rating on the stock and has a price target of $110.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Judy Hong and Matthew Grainger have a total average return of 17.3% and 4.3% respectively. Hong has a success rate of 73.2% and is ranked #241 out of 3807 analysts, while Grainger has a success rate of 56.1% and is ranked #1062.

Overall, one research analyst has assigned a Hold rating and 3 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $106.33 which is 5.7% above where the stock closed yesterday.