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Why This Philip Morris Earnings Report Is Crucial

Dan Caplinger
July 15, 2013

Philip Morris International (NYSE: PM) will release its quarterly report on Thursday, and projections suggest that it will manage to deliver decent results for investors. But shareholders don't seem convinced about Philip Morris earnings, as they've recently sent the stock down substantially from its May highs.

Many investors have gravitated to Philip Morris in the belief that by doing all of its business overseas, it won't ever have to worry about cigarette warnings and other regulatory measures that its U.S. peers face. But increasingly, it's becoming evident that other countries are looking for ways to control tobacco in the same way the U.S. does. Let's take an early look at what's been happening with Philip Morris over the past quarter and what we're likely to see in its quarterly report.

Stats on Philip Morris

Analyst EPS Estimate


Change From Year-Ago EPS


Revenue Estimate

$8.19 billion

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

Will Philip Morris earnings go up in smoke this quarter?
Analysts have cut back on their earnings calls about Philip Morris lately, cutting their June-quarter estimates by $0.08 per share and their full-year 2013 consensus by double that amount. The stock has also reflected that uncertainty, falling 5% since early April.

Ever since its spinoff from Altria (NYSE: MO), Philip Morris has benefited from higher growth prospects from its international sales. At the same time that Altria, Lorillard, and other U.S. tobacco companies have struggled to keep their revenues moving higher, the argument is that other countries with less regulation offer better environments to foster sales growth for Philip Morris. That's true to an extent, although the edge that Philip Morris has had over its peers has narrowed considerably in recent years and is slated to continue to shrink in the future.

But Philip Morris has its own challenges to face. Last qua