Shares of the tobacco giant
Philip Morris International
) reached 52-week high of $95.42 on Wednesday, Apr 10, in
anticipation of a robust first quarter 2013 earnings scheduled to
be released on Apr 18, 2013 They surpassed the previous 52-week
high of $94.45 on Apr 2.
The closing price of the cigarette manufacturer was $95.26 on
Apr 10, representing a solid 1-year return of about 8.84% and
year-to-date return of about 9.82%. Average volume of shares
traded over the last three months stands at approximately
With premium positioning of strong brands, global scale, and a
leading market share Philip Morris is able to beat estimates and
deliver higher earnings in the first quarter of 2013.
Philip Morris has a strong brand portfolio of cigarettes,
which helps it to command a leading market share in the tobacco
industry. Marlboro leads the brands and has the largest market
share among its close competitors. Marlboro's market share has
been rising sequentially for several quarters. In 2012, the share
of this leading brand reached 9.3%.
On the other hand, Philip Morris' ability to adapt to changing
consumer demand allows it to maintain its earnings growth. The
company is scheduled to prepare a set of 'Next Generation
Product' (NGP) in the year 2014, which is aimed at attracting
adult consumers to use its products while at the same time
reducing the risks related to tobacco products. This comes amid
vigorous anti tobacco campaigns all around the world.
The company reported modest earnings gain in the recently
concluded 2012-fourth quarter. Adjusted fourth-quarter 2012
earnings per share of $1.24 surpassed the comparable prior-year
quarter earnings by 12.7% and beat the Zacks Consensus Estimate
of $1.22. Earnings shot up on the back of higher revenues and
favorable impact of lower shares outstanding.
Excluding the impact of currency translation and acquisitions,
net revenues increased roughly 6.4% from the prior-year quarter,
mainly driven by favorable pricing.
For 2013, Philip Morris expects earnings to be in the range of
$5.68 to $5.78 per share, representing a growth rate of
approximately 10% to 12% versus adjusted earnings of $5.22 per
share in 2012.
Philip Morris has been a regular dividend payer and its
annualized dividend is $3.24 with a dividend yield of about 3.4%.
The company had raised its dividend by 10.4% to 85 cents in Sep
2012 from 77 cents paid earlier.
It was the fifth consecutive annual dividend increment after
the company was spun out from
Altria Group Inc.
) in 2008. The previous four dividend increases were 17.4%, 7.4%,
10.4% and 20.3% in 2008, 2009, 2010 and 2011 respectively.
Other Stocks to Consider
Philip Morris currently carries a Zacks Rank #3 (Hold).
However, there are other favorable stocks in the tobacco sector
that are worth considering. They include
) with a Zacks Rank #2 (Buy) and
) with a Zacks Rank #1 (Strong Buy).
LORILLARD CO (LO): Free Stock Analysis Report
MACYS INC (M): Free Stock Analysis Report
ALTRIA GROUP (MO): Free Stock Analysis Report
PHILIP MORRIS (PM): Free Stock Analysis
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