Philip Morris Cuts Earnings, Revenue Growth Forecasts -- Earnings Review

   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 [e-mail]

(END) Dow Jones Newswires

July 19, 2018 08:28 ET (12:28 GMT)

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