Will Philip Morris’s 3Q17 Earnings Beat Analysts’ Estimates?

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Will Philip Morris’s 3Q17 Earnings Beat Analysts’ Estimates? PART 1 OF 6

Can We Expect Philip Morris’s 3Q17 Earnings to Boost Its Stock Price?

Stock performance

Philip Morris International (PM) is scheduled to announce its 3Q17 earnings before the market opens on October 19, 2017. On October 10, Philip Morris was trading at $115.17, which represents a fall of 5.3% since the announcement of its 2Q17 earnings on July 20, 2017.

Can We Expect Philip Morris&#8217;s 3Q17 Earnings to Boost Its Stock Price?

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In 2Q17, Philip Morris (PM) posted earnings per share (or EPS) of $1.14 on net revenues of ~$6.9 billion. Analysts were expecting the company to post EPS of $1.23 on revenues of ~$7.1 billion. The company noted that the decline in cigarette shipments and unfavorable currency exchange contributed to its lower earnings. 

After posting lower-than-expected 2Q17 earnings, Philip Morris’s management lowered its 2017 guidance to $4.78–$4.93 from an earlier estimate of $4.84–$4.99. The lowering of its 2017 EPS guidance and lower-than-expected 2Q17 earnings led to the fall in Philip Morris’s stock price.

Year-to-date performance

Despite the recent fall, Philip Morris has returned 25.9% year-to-date. During the same period, its peers Altria Group (MO) and British American Tobacco (BTI) have returned -3.9% and 14.9%, respectively.

Among the broader comparative indexes, the Consumer Staples Select Sector SPDR ETF (XLP), and the S&P 500 Index (SPX) have returned 4.7%, and 13.9%, respectively. XLP has invested 15.9% of its holdings in cigarette and tobacco companies.

Series overview

In this series, we’ll discuss the Wall Street analysts’ revenue and EPS estimates for 2017. Also, we’ll cover the management’s guidance for 2017 and analysts’ expectations for the next four quarters. Finally, we’ll look at the company’s valuation multiples and analysts’ recommendations.

Next, we will look at analysts’ revenue estimates for 3Q17.


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