Strong Quarter for Philip Morris International

Strong Q. Increasing dividend, $1.5B in share repurchases, 18% eps growth (ex currency) and full year forecast raised. (See earnings call transcript.)

Now, admittedly we cannot just exclude currency and ignore its effect on earnings. It is a part of the equation and goes to reported results. BUT, since currency will vary wildly quarter to quarter, we have to look at results excluding it to get a true picture of the health of the underlying business. Reported results are what they are, but the results excluding currency variations give us the true picture of what the business is doing.

Yes, volumes were lower but this was expected due both to the economic environment and to pricing actions taken by the company during the quarter. The good news here is that as global economies improve, volume will return and in the cigarette industry, price increase stick meaning earnings will be further bolstered.

These results strengthen the investing thesis in Phillip Morris International (PM).

Here is the 8-K

Comments

[sethmcs:]

Tobacco is addictive and so is heroin both have inelastic demand. Raise prices and people will pay. Oh and the greatest part is government is part of the conspiracy. Sin taxes are the easiest taxes to raise. I have done extremely well with RAI and MO over the years. The key is cashflow is strong and fear is perpetual. Makes for good value investment. PMI pays a smaller dividend and is less interesting.

Oct 24 01:22 AM