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

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Part 4
Will Philip Morris’s 3Q17 Earnings Beat Analysts’ Estimates? PART 4 OF 6

Could Philip Morris Beat Analysts’ Estimated Earnings in 3Q17?

3Q17 estimates

In 3Q17, analysts expect Philip Morris International (PM) to post earnings per share (or EPS) of $1.38, which represents 10.4% growth from $1.25 in 3Q16. The company’s EPS growth is expected to be driven by revenue growth and expansion of net margins.

Could Philip Morris Beat Analysts’ Estimated Earnings in 3Q17?

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The company’s management stated that it does not intend to repurchase shares in 2017. From the chart above, we can see that the company has met analysts’ estimates only once in the last four quarters. When the company fails to meet analysts’ estimates, the stock price of the company could fall. 

After the announcement of its 2Q17 earnings on July 20, Philip Morris’s stock price fell 1.4% from its previous day’s closing price.

Peer comparisons and outlook

In 3Q17, analysts expect Altria Group (MO) to post EPS of $0.87, which represents 6.7% growth from $0.82 in 3Q16.

For the next four quarters, analysts expect Philip Morris to post EPS of $5.16, which represents 15.4% growth from $4.47 in the corresponding four quarters of the previous year. The company’s management has set its EPS guidance for 2017 to $4.78–$4.93, which represents growth of 6.7%–10.0% from $4.48 in 2016.

Dividends

On September 26, 2017, Philip Morris announced dividends of $1.07 per share at a yield of 3.7% and a payout ratio of 88.2%. Analysts expect the company to pay dividends of $1.07 in 4Q17 to take the total for 2017 to $4.22, which represents 2.4% growth from $4.12 in 2016.

Next, we’ll look at Philip Morris’s valuation multiple.

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