Philip Morris International
Analysts expect Philip Morris International (PM) to post revenue of $31.3 billion in the next four quarters, representing 5.7% YoY (year-over-year) growth from $29.6 billion. Philip Morris expects currency-neutral net revenue growth of 8.0% this year.
Philip Morris’s revenue growth is expected to be driven by price variance and RRP (reduced-risk product) sales growth, and partially offset by lower cigarette shipment volumes. The company expects pricing variance for combustible tobacco products to boost revenue by 7% this year, and expects RRP revenue to rise 80%–90% YoY from $3.6 billion.
Since its iQOS sales slowdown, the company is focusing on strengthening loyalty programs for existing iQOS users and has announced that it is not changing its $600 million incremental RRP investment plan for 2018. The company also plans to introduce a new iQOS version by the end of the year, and its new design and user interface are expected to drive the company’s revenue. However, analysts expect some revenue growth to be offset by cigarette shipment volume decline.
Altria’s revenue estimates
In the next four quarters, analysts expect Altria’s (MO) revenue to grow 0.8% YoY to $19.7 billion from $19.6 billion. To drive sales, Altria has restructured to form two divisions: core tobacco and innovative tobacco products. Altria has also reported that it will be employing a chief growth officer to accelerate the introduction of innovative products and technologies to market, and is focusing on innovative products and packaging, enhanced trade programs, and marketing and promotional initiatives to drive sales. Next, we’ll look at the tobacco companies’ margins.