Philip Morris 4Q and FY13 Earnings In Line - Analyst Blog

By
A A A
Share |

Philip Morris International Inc. ( PM ) reported adjusted fourth-quarter 2013 earnings per share of $1.37, in line with the Zacks Consensus Estimate. However earnings were higher than the prior-year quarter earnings by 10.5%.

Earnings were on the upswing owing to positive pricing and lower shares due to buyback. Excluding an unfavorable currency impact of 11 cents, earnings of $1.53 exceeded the prior-year quarter earnings by 19.4%.

Revenues and Margin

Net revenue went down by 1.3% to $7.8 billion. However, it beat the Zacks Consensus Estimate of $7.7 billion by 1.3%. Excluding the impact of an unfavorable currency translation, net revenue increased roughly 2.5% from the prior-year quarter, mainly driven by favorable pricing.

During the quarter, net revenue in the European Union (EU) climbed 3.7% (down 0.4% excluding currency) from the prior-year quarter to $2.1 billion predominantly reflecting a lower total market, notably in Germany, Italy and Spain.

Net revenue in the Eastern Europe, the Middle East & Africa (EMEA) region stood at $2.3 billion, up 5.5% (up 7.9% excluding currency) from the prior-year quarter fuelled by driven by favorable pricing of $196 million, principally in Russia and Ukraine.

Asia recorded net revenue of $2.5 billion, down 11.7% (down 2.2% excluding currency) from the prior-year quarter due to unfavorable volume/mix primarily in Japan and Philippines.

In Latin America and Canada, revenues went up 4.0% (up 11.5% excluding currency) to $917 million in the quarter due to favorable pricing in Argentina, Canada and Mexico.

Philip Morris' quarterly gross profit declined 0.4% from the prior-year quarter to $5.2 billion, mainly due to higher excise tax faced by the company during the quarter. Operating income slipped 1.1% year over year to $3.2 billion during the quarter due to higher marketing, administration and research costs.

Fiscal Results

For fiscal 2013, adjusted earnings per share of $5.4 were inline with the Zacks Consensus Estimate. Earnings, however, exceeded the prior-year results by 3.4%.

Net revenue went down by 0.5% to $31.2 billion, in line with the Zacks Consensus Estimate, Excluding the impact of an unfavorable currency translation, net revenue increased roughly 1.9% from the prior-year quarter, mainly driven by favorable pricing.

Financial Update

During the quarter, Philip Morris spent $1.5 billion to repurchase 16.7 million shares.

Guidance

Management expects its GAAP earnings to be in the range of $5.02 to $5.12 in fiscal 2014 versus $5.26 in 2013. The company expects currency impact of 71 cents per share for 2014. Excluding the currency impact, the company expects its earnings to increase by approximately 6% to 8% from adjusted earnings of $5.40 in 2013.

Philip Morris carries a Zacks Rank #4 (Sell). Other diversified retailers worth considering include Reynolds American Inc. ( RAI ) and Lorillard Inc. ( LO ), which carry a Zacks Rank #2 (Buy).



LORILLARD CO (LO): Free Stock Analysis Report

PHILIP MORRIS (PM): Free Stock Analysis Report

REYNOLDS AMER (RAI): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: EU , LO , PM , RAI

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Stocks

Referenced

0%
100%
60%
100%

Most Active by Volume

89,970,926
  • $16.15 ▲ 0.12%
77,131,582
  • $58.94 ▼ 1.31%
67,336,935
  • $26.56 ▲ 1.68%
48,814,124
  • $86.20 ▲ 0.02%
47,526,126
  • $23.21 ▲ 0.78%
44,660,424
  • $23.91 ▲ 6.36%
38,799,699
  • $4.289 ▲ 4.36%
36,199,890
  • $40.01 ▼ 0.97%
As of 4/17/2014, 04:07 PM