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Will Philip Morris Beat Wall Street Revenue Estimates in 4Q15?

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Dec. 4 2020, Updated 3:52 p.m. ET

Revenue in previous quarter

Philip Morris International (PM) is set to release its 4Q15 and full year earnings before the market opens on February 4, 2016. The fourth quarter for fiscal 2015 ended on December 31, 2015. Philip Morris International’s earnings and revenue were ahead of consensus Wall Street analyst expectations in 3Q15, which ended September 30, 2015.

Philip Morris’s reported net revenue excluding excise taxes fell 11.8% to $6.9 billion in 3Q15 compared to $7.9 billion in 3Q14. Reported revenue was negatively impacted by $1.4 billion due to the adverse foreign currency impact from the US dollar. However, excluding the impact of unfavorable currency movements, net revenue rose by 5.9% in 3Q15.

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Increase in revenue

The increase in net revenue excluding the adverse impact of foreign currencies was primarily due to the stronger pricing impact of $0.5 billion from across all regions. During 3Q15, PM increased retail (XRT) prices in key markets like Argentina, Indonesia, and Russia. According to CFO Jacek Olczak, the pricing variance of $1.6 billion through September will help the company to achieve pricing above its historical annual average of ~$1.8 billion for the full year.

For 4Q15, Wall Street analysts’ consensus revenue estimate is $6.5 billion, an 8.8% decrease from the revenue in the same quarter last year.

Will iQOS impact revenue in 4Q15?

Philip Morris plans to focus on incremental investments to support the expansion of its heat-controlled tobacco sticks called iQOS, which could significantly impact its fourth quarter results. To learn more about PM’s reduced-risk products, please read Philip Morris’s New Innovative Products in the Reduced-Risk Tobacco Market.

It also plans to accelerate spending behind planned launches in 2015 and 2016 to gain momentum for its cigarette brand portfolio.

Peers in e-cigarette market

Competitors like British American Tobacco (BTI), Reynolds American (RAI), and Vector Group (VGR) also produce innovative e-cigarettes. Vype (BTI), Vuse (RAI), and Zoom (VGR) are the e-cigarette brands produced by these companies.

PM makes up 0.8%[1. Updated on January 25, 2016] of the PowerShares FTSE RAFI US 1000 Portfolio ETF (PRF).

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