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Philip Morris maintains 2024 earnings forecast amid challenges

Published 03/09/2024, 12:18
© Reuters.
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STAMFORD, CT - Philip Morris International Inc. (NYSE: NYSE:PM) CEO Jacek Olczak spoke today at the Barclays (LON:BARC) Global Consumer Staples Conference, affirming the company's 2024 full-year earnings forecast. Despite facing industry headwinds, the tobacco giant reiterated its projected reported diluted earnings per share (EPS) range of $5.89 to $6.01 and an adjusted diluted EPS of $6.33 to $6.45. This projection represents an 11% to 13% increase on a currency-neutral basis from the adjusted diluted EPS of $6.01 in 2023.

The forecast, initially released on July 23, 2024, accounted for various adjustments, including asset impairment and exit costs, termination of a distribution arrangement in the Middle East, and other charges related to the ongoing conflict in Ukraine, among others. After these adjustments, the adjusted diluted EPS, excluding currency impact, is estimated to be between $6.67 and $6.79, up from $6.01 in the previous year.

Philip Morris's commitment to a smoke-free future continues as it evolves its portfolio beyond traditional tobacco and nicotine products. The company has invested over $12.5 billion since 2008 in developing smoke-free alternatives, with the goal of eventually ceasing cigarette sales. PMI's smoke-free products, which include the IQOS and ZYN brands, were available in 90 markets as of June 30, 2024, and used by approximately 36.5 million adults worldwide. These products accounted for about 38% of PMI's net revenues in the first half of 2024.

The company also signaled its intention to venture into wellness and healthcare through its Vectura Fertin Pharma business, aiming to deliver seamless health experiences.

PMI's forward-looking statements in the press release are subject to risks and uncertainties, including market conditions, regulatory changes, and the potential impacts of the war in Ukraine. The company cautions that actual results could differ materially from these projections due to these risks.

The information in this article is based on a press release statement from Philip Morris International.

In other recent news, Philip Morris International Inc. has made a significant $232 million investment into its Owensboro, Kentucky manufacturing facility. This expansion, aimed at increasing production capacity for ZYN nicotine pouches, is projected to be completed by 2025. The investment is expected to generate 450 direct new jobs and approximately $277 million in annual regional economic impact.

The company has also been recognized by Goldman Sachs (NYSE:GS), who added Philip Morris International to its US Conviction List, indicating confidence in the company's potential market performance. Additionally, both Deutsche Bank (ETR:DBKGn) and BofA Securities have maintained a Buy rating on shares of Philip Morris International, following the company's strong second-quarter performance which reported a gross profit of $6,139 million and an adjusted operating income rise of 12.5% to $3,656 million.

In terms of other company news, Philip Morris International reported significant organic top-line and operating income growth for the second quarter of 2024, primarily driven by its smoke-free products. The company has also revised its full-year growth forecast for 2024 upwards and continues to focus on sustainability and cost savings. These are the recent developments for Philip Morris International Inc.

InvestingPro Insights

Philip Morris International Inc. (NYSE: PM) has demonstrated a robust financial performance with a consistent history of rewarding its shareholders. As per InvestingPro data, the company boasts an impressive market capitalization of $191.69 billion, reflecting its significant presence in the industry. The company's commitment to increasing shareholder value is further evidenced by its impressive track record of raising dividends, with an increase for 16 consecutive years, showcasing its financial stability and dedication to returning capital to investors.

InvestingPro Tips highlight that Philip Morris operates with a moderate level of debt, which provides the company with the flexibility to navigate market fluctuations and invest in growth opportunities, such as its smoke-free product portfolio and ventures into wellness and healthcare. Additionally, the company's gross profit margins remain strong, sitting at 63.87% for the last twelve months as of Q2 2024. This high margin indicates effective cost management and the ability to generate significant profit from its revenues, supporting the company's strategic investments in innovation and market expansion.

Moreover, with analysts revising their earnings upwards for the upcoming period, there is an optimistic outlook on the company's future performance. This positive sentiment is likely factored into the company's stock price, which is trading near its 52-week high, with a price percentage of 99.87% of that peak. The strong return over the last three months, at 21.3%, underscores the market's confidence in the company's strategic direction and growth prospects.

For those interested in deeper analysis, InvestingPro offers additional insights and metrics, with a total of 15 InvestingPro Tips available for Philip Morris International, which can be accessed at https://www.investing.com/pro/PM. This comprehensive analysis can help investors make more informed decisions regarding their investments in Philip Morris International.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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