Get All Access for FREEMarket News & Research,
Live Transcripts & Audio,
and a whole lot more…
$PM 1Q15 10-Q: At March 31, 2015, PMI had contracts with aggregate notional amounts of $18.7Bil of which $2.1Bil related to cash flow hedges, $3.8Bil related to hedges of net investments in foreign operations and $12.8Bil related to other derivatives that primarily offset currency exposures on intercompany financing.
Tobacco firm $PM has announced its decision to delist its shares from French stock exchange Euronext Paris. The request for delisting has been approved by the BoD of Euronext. Pursuant to the delisting, shares listed on Euronext will be traded on the New York Stock Exchange.
$PM released its latest Scientific Update for Smoke-Free Products, a regular publication on its research efforts to develop and assess a range of smoke-free alternatives to cigarettes. The company will make data and results from the non-clinical and clinical program around its smoke-free product, IQOS, available to the public by early 2018.
Elaborating on its strategy with regard to returning capital to shareholders, $PM said the focus will be on dividends in future. The company is unlikely to embark on a share buyback, unless the variation in currency values turns favorable. In the coming quarters, the heated tobacco device IQOS will be made available in more international markets.
Presenting details of the 3Q17 results, $PM said earnings were impacted by depreciation of the Egyptian pound. Going forward, Philip Morris intends to continue shifting its business to reduced risk products such as IQOS, its heated tobacco device. The company expects to overcome the pricing issues in Russia, one of its major markets, by next year.
$PM said the industrial dynamics in Saudi Arabia and Russia had put significant pressure on its 3Q17 financial results, necessitating a downward revision of the fiscal 2017 earnings outlook. Currently, the volume of shipments is forecast to decline around 3% in 2017, compared to the earlier estimate of a 3-4% decrease.
Tobacco giant $PM, which is shifting its business to smoke-free products, posted a 2% gain in 3Q17 profit as a marked growth in shipments of reduced risk products and broader market share pushed up revenues by 3.5% to $21Bil. Earnings per share advanced to $1.27 from $1.25 last year. Excluding the impact of unfavorable currency, earnings rose 11%.
Tobacco giant $PM declared a quarterly dividend of $1.07 per share on its common shares, raising the annualized dividend rate by 2.9% to $4.28 per share. The dividend is payable on October 12, 2017, to shareholders of record on September 27, 2017.
$PM is all set to embark on a transformation by shifting its business to smoke-free products. According to the company’s sustainability report, the focus will be on replacing cigarettes with smoke-free products. This year, Philip Morris intends to allocate over 70% of its global R&D expense and 30% of commercial expenditure to smoke-free products.
$MO, which competes with $PM and $BTI, reaffirmed its 2017 adjusted EPS guidance of $3.26-3.32. This range represents a growth rate of 7.5-9.5% from an adjusted diluted EPS base of $3.03 in 2016. $MO still sees 2017 effective tax rate on operations of about 36%. $MO still expects higher adjusted diluted EPS growth in 2H17 compared to 1H.
$PM said it remains on track to expand further into key international markets. The company continues to forecast operating cash flow of about $8.5Bil and capital expenditures of $1.6Bil for 2017. Going forward, the main focus will be on unblocking supply chains for Japan, a key market for Philip Morris.
$PM expects total shipment volumes to decline 3-4% in the full fiscal year, broadly in line with last year. Overall performance in the international markets will remain muted in the coming quarters, due to unfavorable exchange rates. Currency-neutral net revenues are seen rising 7% this year.
$PM currently expects full-year 2017 EPS to be between $4.78 and $4.93, at the existing exchange rates. Adjusted for currency impact and other items, the projected EPS represents a 9-12% YoY increase. The company forecasts a net revenue growth of above 7% for 2017, excluding excise taxes and other items.
$PM’s 2Q17 earnings dipped modestly to $1.14 per share as the strong dollar continued to drag the bottom line. Adjusted for unfavorable currency, earnings rose 8.7%. Revenues of the tobacco behemoth, excluding excise taxes, rose 4% YoY to $6.9Bil. The volume of cigarette and heated tobacco unit shipments dropped 5% to 199.9Bil during the quarter.
$PM plans to invest about $320MM in a new high-tech facility in Dresden, Germany, to produce HEETS, the tobacco units to be used with the electronic tobacco heating device IQOS. Construction of the 80,000 m2 facility is scheduled to begin in late 2017. Once fully operational in early 2019, the factory is expected to employ about 500 people.
$PM holds firmly to its conventional business in markets where it faces pressures of any kind. Italy is slightly complicated because the company has been focusing on the combustibles business while also building the base for the IQOS business. The tax structure in Italy is not supportive for narrowing the price. Germany and France are strong.