Philip Morris Cuts Earnings, Revenue Growth Forecasts -- Earnings Review
July 19 2018 - 8:43AM
Dow Jones News
By Kimberly Chin
Philip Morris International Inc. (PM) reported its
second-quarter earnings Thursday. Here's what you need to know:
EARNINGS: The international tobacco company reported net income
rose 23% from a year earlier to $2.2 billion, or $1.41 a share.
Analysts polled by Thomson Reuters had expected earnings of $1.9
billion, or an adjusted $1.23 a share.
REVENUE: Revenue increased 12% to $7.7 billion, slightly more
than the $7.5 billion analysts expected.
VOLUME: Cigarette and heated-tobacco volume increased 0.9% to
201.7 billion units overall. Cigarette shipments dropped by 1.5% to
190.7 billion units while heated-tobacco shipments increased by 73%
to 11 billion units.
OUTLOOK: The company lowered its 2018 earnings per share
guidance to between $5.02 to $5.12 from its prior forecast of $5.25
and $5.40, taking into account the costs of its product and
marketing initiatives, and weaker-than-expected demand for its IQOS
smoke-free electronic cigarettes in Japan. It guides lower
currency-neutral revenue growth of about 3% to 4% in 2018 from its
previous guidance of 8% growth.
COMMENT: "We are implementing the right marketing and product
measures to reinvigorate growth in Japan, which is undoubtedly well
below our initial expectation this year," Chief Executive Andre
Calantzopoulos said in a statement. These initiatives will "require
the rightsizing this year of existing IQOS device and consumable
inventories," he said. "Our revised 2018 EPS guidance reflects this
decision, as well as the shift in previously positive currency to a
headwind for the full year." However, he said that a lower
effective tax rate should partially offset those headwinds.
STOCK: Shares were down 3.8% in premarket trading.
Write to Kimberly Chin at kimberly.chin@wsj.com
(END) Dow Jones Newswires
July 19, 2018 08:28 ET (12:28 GMT)
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