Philip Morris (PM) to Report Q4 Earnings: What''s in Store?

Source from:  Zacks 02/02/2016

Philip Morris International Inc. PM is set to report fourth-quarter 2015 results on Feb 4. Last quarter, the company delivered a positive earnings surprise of 11.71%.

In fact, the tobacco major delivered positive surprises in all the four previous quarters, with an average earnings surprise of 14.27%.

Let's see how things are shaping up for this announcement.

Factors at Play

Improved volumes, positive pricing, strong brand portfolio, and product innovation have been boosting the company's results for the past few quarters. The company expects the trend to continue in the fourth quarter as well.

The company is focusing on boosting its unconventional tobacco products. It has entered into a strategic agreement with Altria Group, Inc.

MO, whereby the company will market Altria's MarkTen e-cigarettes internationally and Altria will distribute two of Philip Morris' heated tobacco products in the U.S. The companies have also decided to partner on a regulatory engagement related to the products. The companies will also work on gaining shares as well as improving existing versions for the products.

However, Philip Morris has been facing pressure from the anti-tobacco campaigns that are gathering pace worldwide. Governments across the world have imposed higher excise taxes on cigarettes leading tobacco companies to raise prices which, in turn, are lowering volumes. Further, fake versions of top-branded cigarettes sold by local retailers are denting volumes. This trend is likely to continue in the fourth quarter as well thus putting pressure on both the top line and the bottom line. Enditem