Philip Morris Reaches 52-Week Low

Source from:  Zacks 01/15/2014

Shares of  Philip Morris International Inc. (NYSE:PM) hit a new 52-week low of $82.27 on Jan 14.  The New York-based tobacco company has witnessed roughly 4.15% year-to-date dip in share price, which has been declining since the release of lower-than-expected third-quarter 2013 results on Oct 17, 2013. Average volume of shares traded over the last three months came in at approximately 5,147 thousand.

Factors Hurting Philip Morris

The Marlboro owner reported decent earnings of $1.44 per share beating the Zacks Consensus Estimate by 0.7% and the prior-year earnings by 4.3%. However revenues missed the estimate due to higher-than-expected unfavorable foreign exchange impact and 6% decline in volume due to decline in demand owing to ongoing anti-tobacco campaigns. Governments around the world are hiking excise tax on cigarettes and imposing packaging and advertising restrictions on cigarette makers.

InNov 2013, Philip Morris announced that it is going to foray into the e-cigarette category in 2015. However, recent developments in the European Union indicate that there can be a probable restriction on the sale of e-cigarettes, which can be a concern.

Moreover, gross profit declined 0.5% from the prior-year quarter to $5.3 billion, mainly due to higher excise tax during the quarter. Operating income slipped 1.0% year over year to $3.7 billion during the quarter due to higher marketing, administration and research costs.

Philip Morris estimates a stronger currency headwind in the upcoming quarter and expects the currency impact to be higher at 33 cents per share for fourth-quarter 2013 from 31 cents per share.

Almost all the estimates were revised downward following the cautious outlook of the company. The Zacks Consensus Estimate for fourth-quarter 2013 slipped 9.2% to $1.28 per share over the last 60 days. For 2013, the Zacks Consensus Estimate slipped 0.4% to $5.41 per share over the same time frame. Enditem