) is set to report fourth quarter and full year 2012 results on
Feb 7. Last quarter it posted a +4.3% positive surprise. Let's
see how things are shaping up for this announcement.
Growth Factors This Past Quarter
Higher revenues and the favorable impact of lower shares
outstanding helped Philip Morris earn a modest profit in the past
quarter. The company maintains a strong portfolio of brands and
enhances its brand value with the help of continued
The Marlboro brand of cigarettes maintained a leading share in
the market with aggressive marketing of the brand and innovative
packaging and taste. It helped the company to take share from
The company's foray into less harmful tobacco alternatives
also addresses changes in consumer preferences. Moreover, Philip
Morris continues to penetrate rapidly into emerging markets with
rising populations. It has helped the company expand its customer
base and thus boost earnings.
Our proven model does not conclusively show that Philip Morris
is likely to beat earnings this quarter. That is because a stock
needs to have both a positive Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not
the case here as you will see below.
That is because the Most Accurate Estimate stands at $1.23 while
the Zacks Consensus Estimate is lower at $1.22. That is a
difference of +0.82%.
Zacks Rank #4 (Sell):
Philip Morris' Zacks Rank #4 (Sell) lowers the predictive power
of ESP because the Zacks Rank #4 when combined with a positive
ESP makes surprise prediction difficult. We caution against
stocks with Zacks #4 and #5 Ranks (Sell rated stocks) going into
the earnings announcement, especially when the company is seeing
negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies to consider as our model shows
they have the right combination of elements to post an earnings
beat this quarter:
J.M. Smucker Co.
): Earnings ESP of +0.73% and Zacks Rank #2 (Buy).
Green Mountain Coffee Roasters Inc.
): Earnings ESP of +3.08% and Zacks Rank #2 (Buy).
Reynolds American, Inc.
): Earnings ESP of +1.35% and Zacks Rank #3 (Hold).
GREEN MTN COFFE (GMCR): Free Stock Analysis
PHILIP MORRIS (PM): Free Stock Analysis
REYNOLDS AMER (RAI): Free Stock Analysis
SMUCKER JM (SJM): Free Stock Analysis Report
To read this article on Zacks.com click here.