The key strategy that Philip Morris has emphasized all year is its stable of reduced-risk products, especially the iQOS heat-not-burn technology that it has helped pioneer. The rollout of iQOS continued during the year, and in November, the company said that it would make new launches in Moscow, Lisbon, and Bucharest. With past tests in markets in Japan and Italy, Philip Morris has been encouraged by early results, and hopes that its products will be able to help differentiate it from British American Tobacco and other rivals around the world.
Philip Morris: Sales and earnings
Revenue, Past 12 Months
1-Year Revenue Growth
Net Income, Past 12 Months
1-Year Net Income Growth
Data source: S&P Capital IQ .
What's ahead for Philip Morris?
One substantial threat for Philip Morris is on the regulatory front, where a host of countries are considering plain-packaging laws that would prevent Philip Morris from having free rein to market its cigarettes in its chosen manner. With key legal battles ongoing, Philip Morris and British American Tobacco alike hope that they'll once again hold regulators at bay, especially if the effectiveness of plain-packaging turns out to be less than advocates had hoped.
Philip Morris would do a lot better if the U.S. dollar would stop strengthening, but at least for now, few market participants think that foreign currencies will bounce back from their long-term weakness. Even with those challenges, though, Philip Morris has done well to keep itself moving forward, and its strong brand and pricing power should help the tobacco giant fare well against British American Tobacco and its other competitors around the world in the year to come.
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The article Philip Morris in 2015: Why It's Risen 10% originally appeared on Fool.com.
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