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Philip Morris: What I'm Watching

Bill Maurer profile picture
Bill Maurer


  • Analysts expect top and bottom line growth.
  • How much has the currency situation changed?
  • What are debt maturity plans?

Shares of cigarette giant Philip Morris (NYSE:PM) have done quite well over the past year. A weakening dollar has improved sentiment around this international name, while the company continues to grow its reduced risk product portfolio. Next week, on July 20th, we will see how the company did in the second quarter of 2017. Here are some key items I'm watching currently for the company and the stock.

If we look at overall estimates, the Street is expecting a fair amount of growth from Philip Morris. Analysts think the company will report net revenues of $7.08 billion, 6.5% growth from the year-ago period. On the bottom line, the Street expects adjusted earnings per share of $1.23, which would be up 8 cents from last year's Q2 period.

In the past couple of years, a much stronger US dollar has really hurt the company's results. This year, the dollar currency index has pulled back a bit, primarily thanks to the strength of the Euro. However, we've seen strength in recent months from the Japanese Yen (the company is hedged a bit), Russian Ruble, and Argentinian Peso. At the Q1 report, the company was expecting an 8-cent per share hit this year to earnings, so we'll have to see how much that forecast has changed. Here's the Q1 forecast for overall earnings:

PMI increases, for a favorable discrete tax item of $0.04 only, its 2017 full-year reported diluted earnings per share to a range of $4.84 to $4.99, at prevailing exchange rates, versus $4.48in 2016. Excluding an unfavorable currency impact, at prevailing exchange rates, of approximately $0.08 for the full-year 2017, as well as the tax item of $0.04 recorded in the first quarter, the forecast range represents a projected increase of approximately 9% to 12% versus adjusted diluted earnings per share of $4.48 in 2016.

This article was written by

Bill Maurer profile picture
I am a market enthusiast and part-time trader. I started writing for Seeking Alpha in 2011, and it has been a tremendous opportunity and learning experience. I have been interested in the markets since elementary school, and hope to pursue a career in the investment management industry. I have been active in the markets for several years, and am primarily focused on long/short equities. I hold a Bachelor of Science Degree from Lehigh University, where I double majored in Finance and Accounting, with a minor in History. My major track focused on Investments and Financial Analysis. While at Lehigh, I was the Head Portfolio Manager of the Investment Management Group, a student group that manages three portfolios, one long/short and two long only. I have had two internships, one a summer internship at a large bank, and another helping to manage the Lehigh University Endowment for nearly a year. Disclaimer: Bill reminds investors to always do their own due diligence on any investment, and to consult their own financial adviser or representative when necessary. Any material provided is intended as general information only, and should not be considered or relied upon as a formal investment recommendation.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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