Philip Morris Posts Rise In Profit -- WSJ
April 22 2020 - 03:02AM
Dow Jones News
By Dave Sebastian
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (April 22, 2020).
Philip Morris International Inc. said its profit and sales rose
for the latest quarter but withdrew its guidance for 2020,
expecting reduced travel amid the Covid-19 pandemic to further dent
its duty-free sales.
The tobacco company on Tuesday posted first-quarter earnings of
$1.83 billion, or $1.17 a share, up from $1.35 billion, or 87 cents
a share, in the comparable quarter last year. Adjusted earnings
were $1.21 a share, ahead of the $1.13 a share analysts had
expected.
Sales rose 6% to $7.15 billion. Analysts were looking for $6.84
billion.
The pandemic in its early stages had limited effect on the
company, but it will hurt the company's full-year results, Chief
Executive André Calantzopoulos said.
Mr. Calantzopoulos said the pandemic has reduced duty-free
sales, slowed user acquisition for IQOS, a tobacco heating device
developed by Philip Morris and sold by Altria Group Inc., and
delayed minimum-price enforcement in Indonesia.
"We also have to assume that, in certain markets, unemployment
and related reductions in disposable income will have a temporary
impact on market dynamics or the ability of certain small retailers
to operate," he said.
The company also pulled the guidance it provided on Feb. 6,
citing the coronavirus pandemic's uncertainty.
For the second quarter, the company expects earnings of $1 a
share to $1.10 a share, including a currency effect of about 12
cents a share. It also guided currency-neutral revenue to decline
about 8% to 12%, partly due to lower IQOS sales.
Philip Morris sees the pandemic hurting distributor and
trade-inventory movements by 10 cents a share and duty-free sales
by 9 cents a share for the second quarter. It also expects the
delay in minimum-price enforcement in Indonesia, as well as
reductions in daily consumption and down-trading in certain
developing markets, to weigh on results by 5 cents to 15 cents a
share.
The company said some factories that account for 20% of its
global cigarette-production capacity are currently affected by
government-mandated shutdowns or production limitations.
Shipment volume of cigarettes and heated tobacco units for the
first quarter fell 1.2%. Market share of heated tobacco units for
IQOS rose 1.9 points to 6.6% outside the U.S.
Write to Dave Sebastian at dave.sebastian@wsj.com
(END) Dow Jones Newswires
April 22, 2020 02:47 ET (06:47 GMT)
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