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Why Philip Morris Stock Surged on Thursday

By Daniel Sparks - Jul 18, 2019 at 2:11PM

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Solid execution is driving strong top- and bottom-line performance for the tobacco company.

What happened

Shares of tobacco company Philip Morris International ( PM 1.75% ) jumped on Thursday, climbing about 10% as of 1:22 p.m. EDT.

The stock's gain follows the company's second-quarter earnings release, which featured revenue and non-GAAP (adjusted) earnings per share that crushed analysts' consensus forecasts for the metrics.

A chart showing a stock price moving higher.

Image source: Getty Images.

So what

Philip Morris reported second-quarter revenue of $7.7 billion, down 0.3% from the same period last year. This revenue easily beat analysts' average forecast for $7.4 billion. Adjusted for the deconsolidation of the company's Canadian subsidiary, Rothmans, and Benson & Hedges, as well as for the impact of currency changes, revenue rose 9% year over year.

Non-GAAP earnings per share for the period were $1.46, coming in ahead of analysts' consensus estimate for $1.33.

"Building on our encouraging start to the year, we delivered another strong quarter that continues to demonstrate the soundness of our strategies and the quality of our execution," said Philip Morris CEO Andre Calantzopoulos in the company's second-quarter update.

Now what

The company's strong second-quarter results prompted management to lift its outlook for the year.

Management now expects its adjusted EPS to grow by 9% or greater in 2019. This is up a percentage point from the company's previous forecast for the metric's growth rate.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Philip Morris International Inc. Stock Quote
Philip Morris International Inc.
$89.38 (1.75%) $1.54

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