What Drove Philip Morris’s Revenue in Q3 2018?

In the third quarter, Philip Morris International (PM) posted revenue of $7.50 billion, outperforming analysts’ expectation of $7.17 billion.

Rajiv  Nanjapla - Author
By

Aug. 18 2020, Updated 5:25 a.m. ET

uploads///

Third-quarter revenue

In the third quarter, Philip Morris International (PM) posted revenue of $7.50 billion, outperforming analysts’ expectation of $7.17 billion. Year-over-year, the company’s revenue grew 0.4%. However, excluding unfavorable currency, the company’s revenue grew by 3.3% driven by favorable pricing of ~8.0% in the combustible products business, partially offset by a decline in total shipment volume of 2.1%. Excluding unfavorable estimated distributor inventory movements, the total shipment volume increased by 1.1%.

Article continues below advertisement
Article continues below advertisement

Performance across different regions

  • European Union: The segment earned revenues of $2.47 billion, which represents YoY (year-over-year) growth of 11.9%. However, removing the impact of favorable currency, the company’s revenue increased 10.6% driven by favorable pricing variance primarily in Germany and Italy.
  • Eastern Europe: The revenue from the segment rose 10.4% to $778 million during the quarter. Excluding unfavorable currency, the revenue from the region grew by 16.9% driven by favorable pricing variance in Russia and Ukraine and growth in shipment volume of heated tobacco units, partially offset by a decline in shipment volume of cigarettes. The shipment volume of cigarettes declined primarily in Russia and Ukraine due to the implementation of excise tax and growth in illicit trade.
  • Middle East & Africa: The revenue from the segment increased by 6.0% to $1.14 billion. However, excluding the impact of unfavorable currency, the revenue from the region increased by 15.0% driven by favorable pricing variance, primarily in Egypt and Turkey, and an increase in total shipment volume of 3.3%.
  • South & Southeast Asia: The revenue from the segment increased by 6.0% to $1.20 billion. Excluding the impact of unfavorable currency, the region’s revenue grew by 13.2% driven by favorable pricing variance, primarily in Indonesia and the Philippines, and an increase in cigarette shipment volume of 2.5%.
  • East Asia & Australia: During the quarter, the revenue from the region declined by 27.2% to $1.17 billion. Excluding the impact of currency, the revenue from the region fell by 27.2% due to a decline in total shipment volume of 22.3%, partially offset by favorable pricing variance. The shipment volume of heated tobacco units declined due to net unfavorable estimated distributor inventory movements in Japan.
  • Latin America & Canada: The revenue from the segment declined by 0.4% to $753 million. However, removing the impact of currency, the company’s revenue increased by 2.9% driven by favorable pricing variance, partially offset by a decline in total shipment volume of 3.9%.

Peer comparisons

During the same period, analysts expect Altria Group (MO) to post revenue of $5.21 billion, which represents growth of 1.8% from $5.12 billion in the corresponding quarter of the previous year. Next, we’ll look at analysts’ revenue expectations for the next four quarters.

Advertisement

Latest Philip Morris International Inc News and Updates

    Opt-out of personalized ads

    © Copyright 2024 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.