Philip Morris International Inc.
) is set to report second-quarter fiscal 2014 results on Jul 17.
Last quarter, the company delivered a positive surprise of 1.7%.
Let us see how things are shaping up for this announcement.
Factors to be Considered this Quarter
Philip Morris International has been reporting decent earnings
results for the past few quarters backed by positive pricing. Its
impressive brand portfolio of tobacco and wine products helps it to
maintain a strong business momentum.
However, the company has been facing dwindling volumes due to
declining demand as a result of the ongoing anti-tobacco campaigns.
Governments around the world are levying higher excise taxes on
cigarettes and imposing packaging and advertising restrictions on
cigarette makers. This has resulted in a pricing war among tobacco
companies and significant cut in prices of low and mid-range
The ongoing currency headwinds and difficult pricing environment
prompted Philip Morris to cut its fiscal 2014 outlook on Jun 27,
2014. Philip Morris expects adjusted earnings to grow at the lower
end of its previously provided guidance of 6-8%. Including
unfavorable currency impact Philip Morris expects fiscal
2014 earnings to be within $4.87-$4.97 compared with
$5.09-$5.19 as expected previously. Weak macroeconomic environment
in the European Union and rising illicit trade in Asia coupled with
higher excise taxes have led the company to lower the outlook.
Our proven model does not conclusively show that Philip Morris
International is likely to beat earnings this quarter. A stock
needs to have both a positive
and a Zacks Rank #1, 2 or 3 to surpass earnings estimate. However,
that is not the case here due to the following factors:
ESP for Philip Morris is 0.00%.
Philip Morris has a Zacks Rank #4 (Sell). We caution against stocks
with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the
earnings announcement, especially when the company is seeing
negative estimate revisions.
Other Stocks to Consider
Here are some other companies that investors may want to
consider as our model shows that they have the right combination of
elements to post an earnings beat this quarter:
Domino's Pizza Inc.
, with an Earnings ESP of +1.54% and a Zacks Rank #2 (Buy).
Dr Pepper Snapple Group, Inc.
), with an Earnings ESP of +3.30% and a Zacks Rank #3 (Hold).
The Coca Cola Company
, with an Earnings ESP of +4.76% and a Zacks Rank #3.
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
DOMINOS PIZZA (DPZ): Free Stock Analysis Report
PHILIP MORRIS (PM): Free Stock Analysis Report
COCA COLA CO (KO): Free Stock Analysis Report
DR PEPPER SNAPL (DPS): Free Stock Analysis
To read this article on Zacks.com click here.