Philip Morris International Inc. PM is likely to register a top-line increase when it reports second-quarter 2024 earnings on Jul 23. The Zacks Consensus Estimate for revenues is pegged at $9.13 billion, which indicates a 1.8% increase from the year-ago period.
However, the bottom line is likely to have declined year over year. The consensus mark for quarterly earnings has decreased by 1.3% in the past 30 days to $1.55 per share. This indicates a drop of 3.1% from the year-ago quarter’s reported figure. That said, PM has a trailing four-quarter earnings surprise of 3.2%, on average.
Factors to Note
Philip Morris has been benefiting from its focus on the smoke-free transition, given consumers’ rising inclination toward reduced-risk products. Smoke-free products generated 39% of the company’s net revenues in the first quarter of 2024. Toward this end, robust momentum in IQOS and ZYN has been working well for the company. High combustible pricing has also been aiding amid low cigarette volumes. These upsides are likely to have acted as tailwinds in second-quarter results.
Philip Morris International Inc. Price, Consensus and EPS Surprise
Philip Morris International Inc. price-consensus-eps-surprise-chart | Philip Morris International Inc. Quote
Philip Morris also looks well-positioned due to its strategic priorities for 2024, which revolve around driving sustained growth and innovation across key product lines. The company’s first priority is supporting the continued success of IQOS through continuous innovation, focusing on maximizing user growth with the rollout of ILUMA and advancements in devices and consumables.
PM’s second priority is fueling the strong growth of ZYN in the U.S. market by investing strategically in commercial efforts, expanding capacity and enhancing organizational infrastructure. Additionally, management is dedicated to expanding Philip Morris’ multi-category offering for adult nicotine users globally, with further launches of ZYN and VEEV.
That said, the company has been witnessing continued cost pressures. Management expects the cost of leaf, wages and certain other inputs to remain elevated in 2024, which raises concerns for the second quarter as well. Philip Morris is also focused on making innovation-related investments to grow its smoke-free portfolio, especially the IQOS ILUMA. These investments may have impacted profits. On its lastearnings call the company stated that it expects an elevated organic SG&A increase in the rest of 2024 due to the phasing of investment expenditure.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Philip Morris this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here.
Philip Morris currently carries a Zacks Rank #2, and it has an Earnings ESP of +1.42%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks With the Favorable Combination
Here are some more companies worth considering, as our model shows that these, too, have the right combination of elements to beat on earnings this reporting cycle.
Colgate-Palmolive CL currently has an Earnings ESP of +0.97% and a Zacks Rank #2. The company is expected to register top and bottom-line growth when it reports second-quarter 2024 numbers. The Zacks Consensus Estimate for CL’s quarterly revenues is pegged at $5 billion, which suggests growth of 4% from the prior-year quarter’s reported figure. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Colgate-Palmolive’s quarterly earnings has been unchanged in the past 30 days at 87 cents per share. The estimate suggests almost 13% growth from the year-ago reported quarter. CL delivered an earnings surprise of 4.4%, on average, in the trailing four quarters.
Kimberly-Clark Corporation KMB currently has an Earnings ESP of +1.52% and a Zacks Rank #2. The company is likely to register a decrease in the top line when it reports second-quarter 2024 numbers. The consensus mark for revenues is pegged at $5.08 billion, which implies a decline of 1.1% from the figure reported in the year-ago quarter.
The Zacks Consensus Estimate for Kimberly-Clark’s quarterly earnings per share of $1.68 suggests a 1.8% increase from the year-ago quarter. KMB has a trailing four-quarter earnings surprise of 11.3%, on average.
Coty COTY has an Earnings ESP of +22.73% and a Zacks Rank of 3 at present. The company is expected to register top and bottom-line growth when it reports fourth-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for COTY’s quarterly earnings has been unchanged in the past 30 days at 5 cents per share. The consensus mark for earnings implies 400% growth from that reported in the year-ago quarter.
The Zacks Consensus Estimate for Coty’s quarterly revenues is pegged at $1.4 billion, which indicates growth of 1.9% from the figure reported in the year-ago quarter. COTY has delivered a negative earnings surprise of 22.2%, on average, in the trailing four quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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