Phillip Morris International (PM) is slated to release its first quarter 2012 results before the opening bell on April 19, 2012. The Zacks Consensus Estimate for the fourth quarter is pegged at $1.19 (year-over-year growth of 12.18%) on revenues of $7,210.0 million.
The Zacks Consensus Estimate for the fiscal year 2012 is $5.30 (year-over-year growth of 8.59%) on revenues of $30,648 million.
Fourth Quarter and Fiscal 2011 Recap
Cigarette manufacturer and marketer Philip Morris International Inc. reported adjusted fourth quarter 2011 earnings per share of $1.10, surpassing the year-ago earnings by 13.4% and the Zacks Consensus Estimate by 1.85%.
For fiscal 2011, Philip Morris posted adjusted earnings of $4.88 per share, which was 26.1% higher than $3.87 per share earnings posted a year ago. The fiscal 2011 earnings also beat the Zacks Estimate by 3 cents.
The whole story can be found at Philip Morris Ahead of Estimates
Agreement of Estimate Revisions
Over the past 30 days, one analyst among the 11 analysts covering Philip Morris revised its estimate downward. However quarterly estimate did not change during the period.
For the fiscal 2012, 3 out of 14 analysts covering the stock revised their estimates downward for the last 30 days; the quarterly estimate dropped by 1 cent during the period.
Surprise History
Philip Morris has surpassed Zacks earnings estimates in all the last four quarters. The earnings surprise range from a low of 1.85% to a high of 11.38%, with the average earnings surprise being 6.47%.
Our Recommendation
We feel that the cigarette manufacturer along with its peers in the industry is facing tough times on the back of laws relating to plain packaging and bans on promotional activities for these companies.
However, the company exceeded the Zacks Consensus Estimate in its fourth quarter earnings results on the back of strong pricing, productivity saving and strong performance of the company’s top brands in Europe and Asia. Moreover, Philip Morris is facing a favorable excise tax scenario as many governments like the European Union are taking a softer stance for tobacco companies.
The main brand of the company, Marlboro, is expected to gain share in the market as the price gap between premium and ordinary cigarettes are narrowing due to higher minimum excise tax. The non-combustible, less harmful substitutes of tobacco innovated by the company are expected to generate substantial revenue in the coming quarter.
Management continues to enhance shareholder value through share repurchases and dividends. During the third quarter, the company increased its regular quarterly dividend by 20.3%.
Currently, we have a Neutral recommendation on the stock. Further, Philip Morris holds the Zacks #4 Rank, which translates into a short-term Sell rating.
To read this article on Zacks.com click here.
Zacks Investment Research
