Philip Morris misses profit forecasts, shares fall
Jul. 20, 2017
NEW YORK (AP) — Philip Morris International Inc. missed profit forecasts as demand for traditional cigarettes continues to dry up with smokers either quitting or opting for alternative products. The company shipped fewer cigarettes again last quarter and lowered its outlook for the year, sending the stock down Thursday.
Shipments of traditional cigarettes fell more than 7 percent, following an 11.5 percent decline in the first quarter of 2017. The second-quarter drop was partly offset by demand for its heated tobacco units, but not enough to encourage investors. The company said shipments of heated units rose to 6.4 billion from 1.2 billion in the same quarter last year, driven mostly by demand in Japan.
Philip Morris lowered its earnings-per-share guidance for the year to a range of $4.78 to $4.93, mostly due to continued foreign currency headwinds caused by a strong U.S. dollar. The company previously forecast an earnings-per-share range of $4.84 to $4.99.
For the quarter ended in June, the New York-based company said it earned a profit of $1.14 per share, compared with $1.15 per share for the same period last year.
The results missed Wall Street expectations. The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of $1.23 per share.
Philip Morris reported second-quarter net income of $1.78 billion, virtually unchanged from last year's second quarter.
The seller of Marlboro and other cigarette brands posted revenue of $19.32 billion in the period, up from $19.04 billion last year. Its adjusted revenue, which excludes excise taxes, was $6.92 billion.
Philip Morris shares were down about 1 percent in midday trading after initially falling more than 3 percent. Shares have increased more than 30 percent since the beginning of the year and are up 20 percent in the last 12 months.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on PM at https://www.zacks.com/ap/PM
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