font size
Philip Morris sees the momentum of low-risk products gaining momentum.
Fabrice Coffrini / AFP via Getty Images
Shares fell on Tuesday following the second-quarter results of tobacco giants as the market responded to slightly lower-than-expected year-round guidance. The CFO says the company is “going in the right direction.”
Philip Morris (Ticker: PM) said it generated $ 2.17 billion, or $ 1.39 per share, from $ 1.25 per share in the year-ago quarter. Adjusted revenue, excluding non-recurring items, was $ 1.57 per share. Revenue increased 14% to $ 7.59 billion. Analysts were looking for $ 1.55 EPS with $ 7.67 billion in revenue.
Smoking cessation products accounted for 29% of quarterly net sales, but the company’s modified risk product, IQOS, heated instead of burning tobacco, and had more than 20 million users at the end of the quarter. .. Tobacco volume increased by 3.2%, while heat-not-burn tobacco shipments increased by more than 30%.
Philip Morris said it expects to earn between $ 5.76 and $ 5.86 per share for the full year due to asset impairment and Saudi Arabia’s customs assessment. The company warned earlier.. Adjusted EPS is between $ 5.97 and $ 6.07, two cents higher than previously predicted, but below the consensus requirement of $ 6.08 per share. Philip Morris forecasts intrinsic net revenue growth of 6% to 7%.
It also announced that the board has approved a new three-year, $ 7 billion share buyback program starting in the third quarter.
Philip Morris Chief Financial Officer Emmanuel Babo said Barron’s Following the report, he said, “I am very happy with another very strong quarter.”
Babeau said the year-over-year comparison was easy given the impact of Covid-19 in 2020, but apart from its benefits, many things were preferred this quarter. IQOS has been strong since the first quarter, and the cost efficiency of its products has also provided higher margins.
Philip Morris said heat-not-burn tobacco market share in the IQOS available market (excluding the United States) rose to 7.3% in the quarter. “Awareness is everything” about new risk-reduced products, “I started from scratch in many areas, but now I see a snowball effect. Brand awareness has increased. Smokers are products. “
Although the market varies, he is pleased with IQOS’s performance in many major countries from Russia to Western Europe, and there are currently eight countries in the European Union where IQOS accounts for more than 10% of the market share. .. The company estimates that approximately 14.7 million IQOS users have quit smoking.
Regarding a pandemic that once again grabbed headlines around the world in the midst of an intense Delta subspecies epidemic, Babo says he does not expect “normal” to return in the coming months. But at least in many developed countries, the situation is getting brighter as more people get vaccinated. He is bright that the use of traditional cigarettes tends to increase in social environments such as bars and clubs, and as consumers regain more freedom through vaccination, it will benefit their business. ..
Philip Morris’ share price fell 3.7% to $ 94.31 in recent trading, but has risen more than 15% year-to-date and has risen 25.5% over the past year.
Write a letter to Teresalibus teresa.rivas@barrons.com
