Philip Morris'' Q4 Earnings In Line, Revenues Miss Estimates

Source from:  Zacks 02/05/2016

Philip Morris International Inc.'s PM adjusted fourth-quarter 2015 earnings per share of 81 cents were in line with the Zacks Consensus Estimate. Earnings, however, slipped 21.4% from the prior-year quarter figure due to soft sales.

Excluding an unfavorable currency impact of 18 cents, earnings declined 3.9% year over year.

Revenues and Margin

Net revenue went down 11.2% (up 4% excluding currency) to $6.4 billion and missed the Zacks Consensus Estimate of $6.6 billion by 3.03%. Revenues declined from the year-ago tally due to lower sales in the tobacco category resulting from the shift of preference away from tobacco products. Cigarette shipment volume decreased 2.4% to 222.3 billion units mainly due to a decline in total market share.

Philip Morris' gross profit declined 12% in the quarter from the prior-year quarter to $4.01 billion as lower cost of sales was offset by lower revenues. Operating companies income slipped 22% year over year to $2.1 billion due to higher marketing, administration and research costs.

Segment Details

Net revenue in the European Union region slipped 9.9% from the prior-year quarter to $1.9 billion. Excluding the impact of currency net revenue went up 2.6% predominantly reflecting favorable pricing in Germany, Italy and Poland.

Net revenue in the Eastern Europe, the Middle East & Africa (EMEA) region declined 19.2% year over year to $1.7 billion as the favorable pricing in Russia was offset by unfavorable volume/mix in Kazakhstan, Russia and Ukraine.

Asia recorded net revenue of $1.9 billion, down 4.2% (up 8.3% excluding currency) from the prior-year quarter, due to unfavorable volume/mix and lower total market share, primarily in Australia and Korea.

In Latin America and Canada, revenues slipped 10.8% (up 6.5% excluding currency) to $822 million mainly due to unfavorable volume/mix of $72 million in Brazil, Canada and Mexico.

Fiscal 2015 Results

Full-year 2015 earnings per share of $4.42 were in line with the Zacks Consensus Estimate. Earnings, however, slipped from the prior-year quarter earnings by 12% due to soft sales.

Net revenue went down 10% (up 5.8% excluding currency) to $26.8 billion and missed the Zacks Consensus Estimate of $26.9 billion.

Financial Update

During 2015, Philip Morris increased its regular quarterly dividend by 2% from $1.00 to $1.02, representing an annualized rate of $4.08 per common share. Enditem