Philip Morris Crushes Estimates, Earnings Come in at $1.25 a Share

Updated on

Philip Morris Crushes Estimates, Earnings Come in at $1.25 a Share

Philip Morris International, Inc. (NYSE:PM) is one of the largest tobacco manufacturers and distributors in the world,  just reported earnings.  Analysts were expecting earnings per share of 1.19 compared to 1.06 for Q11. Revenues were expected to come in at 7.26 billion, compared to 6.79 billion one year ago.  Fourth quarter 2011 earnings per share came in at a better than expected, $1.10.

Actual results were $1.25 and for revenue $7.4 billion.

The company which currently has a dividend yield of close to 5% did not announce any changes to the number. The company has been buying back stock as well in an attempt to increase shareholder value.

Until a spin-off in March 2008, Philip Morris International was an operating company of Altria Group, Inc. (NYSE:MO). Although its operational headquarters is located in New York, the company operates out of Switzerland.

Philip Morris has an excise tax on its ‘vice products’ in many countries. In Europe countries are taking a softer stance on taxes, as opposed to the USA where excise taxes on cigarettes have gone up in many states.

Smoking is actually decreasing in America largely due to more health awareness about the dangers of tobacco, and increased taxes on the product. In New York City which recently placed certain restrictions on smoking in certain areas, a box of cigaretters usually costs in the double digits due to taxes. The taxes are also very lucrative for New York and other cities and states looking to raise revenue.

PM now is focused on growth in the international markets especially the emerging markets as middle class wealth induces more people to smoke.

It sells its products in approximately 180 countries, out of the approximately 193 countries in existence today.

Some of the well known brands of cigarettes the company makes includes; Marlboro, Philip Morris, Parliament,  and Virginia Slims.

As of this writing the company’s shares were trading up over 1% in the pre market on the earnings news.


(Disclosure: The author of this article owns shares of the company)

Leave a Comment