Phillip Morris: Smoke 'Em If You Own 'Em

Now this is an earnings release.....

Phillip Morris International (PM) reported its first Post-Altria (MO) spin quarter moments ago and investors ought to be celebrating.

The numbers:

• Diluted earnings per share of $0.89, up 29.0% from $0.69, including the items detailed on Schedule 4
• Adjusted diluted earnings per share of $0.89, up 30.9% from the 2007 pro-forma adjusted earnings per share of $0.68, including the items detailed on Schedule 5
• PMI increases its forecast for 2008 full-year diluted earnings per share, projecting growth of approximately 14% to 16% to a range of $3.18 to $3.24, from a revised 2007 pro-forma adjusted base of $2.79
• PMI’s new guidance reflects favorable currency, business momentum and increased reinvestment in some key markets
• PMI to acquire Interval and other trademarks in the Other Tobacco Products (OTP) category from Imperial Tobacco Group PLC for 254 million euros

"Our robust first quarter results are a terrific start out of the gate,” said Louis Camilleri, Chairman and Chief Executive Officer.

Importantly, we continue to witness an improvement in our business fundamentals as evidenced by the double-digit revenue and income growth recorded in each of our geographic segments.

PMI reaffirms its previously announced intention to pay a dividend at the initial rate of $0.46 per share per quarter, or $1.84 per common share on an annualized basis. PMI has established a dividend policy that anticipates a payout ratio of approximately 65%.

As previously announced, the $13.0 billion two-year share repurchase program for PMI is expected to begin in early May (12.3% of outstanding market cap).

This is what investors who held shares in the spin expected. Mid double digit EPS growth, a massive share repurchase and growth in markets.

This will be a great holding for a very long time...

Disclosure: Long PM,MO

Comments

[mjn185]

Hello Todd

I know that we have words in the past over some of your Starbucks calls but I would like to thank you for writing this well thought out article full of facts and figures. I believe that your analysis is spot on with concerns to the spinoff of PM and this will be a great company to hold for the long run. Thanks for the analysis.

[andrewpmk]

Smokers are quitting in record number in developed countries and Phillip Morris has dumped Kraft and the growing international market, leaving it only with the declining US market and a stake in the SABMiller beer company. This is a terrible long term investment.

[Tim Eriksen]

andrew - PM is Philip Morris International. You thoughts might reflect better on Altria, the US stub. PM looks attractive long term. A Buffett type stock.

[todd su]

mj


thank you

[dividend man]

hello 1 & all!!
thanx Todd for your information...94% of ALL litigation occurs inside the USA & the old Altria has weathered this storm fairly well...now with a pure tobacco play in PM, lets ride this gravy train!!..many foreign countries luv tobacco because of the tax revenue & shorter life spans, etc....& as many of our socialist cities have found out, too much cig. tax = a black market...
remember folks, a certain % of people will ALWAYS have bad habits & the "final frontier" is the legalization of hard drugs.
LOL & happy investing!!!

[20smoney]

My take on PM

20smoney.com/2008/05/1.../

[twinnkie]

might be if the continent of asia can get cheap u.s.a. marlboros.