What Wall Street Expects of Philip Morris’s Revenue in 2019



Analysts’ revenue estimates

For 2019, analysts expect Philip Morris International (PM) to report revenue of $30.69 billion, which represents growth of 3.6% from $29.63 billion in 2018.

Philip Morris’s management expects currency-neutral net revenue growth of at least 5% in 2019, which also accounts for a negative impact of 0.6% from highly inflationary accounting in Argentina. During the period, management expects the total shipment volume of cigarette and heated tobacco units to fall ~1.5%–2.0% while its average pricing variance is expected to be in line with its average annual pricing variance from 2008 to 2017.

By the end of the fourth quarter, Philip Morris’s management estimated IQOS users at ~9.6 million, of whom 70% or 6.6 million have completely switched to IQOS.

To further drive its sales, the company launched its next generation of IQOS devices, the IQOS 3 and IQOS 3 MULTI. globally in mid-November. The company has also introduced less expensive heat sticks for IQOS devices to attract more customers.

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The company had submitted two applications to the FDA. The first requested permission for the sale of IQOS in the United States and the second related to marketing IQOS as safer than cigarettes. Upon receiving approval from the FDA, Philip Morris’s IQOS is to be marketed in the United States by Altria Group (MO).

Last summer, Philip Morris had tested its IQOS MESH, an e-vapor product, in the United Kingdom. Management stated that the learning from this introduction would improve its e-vapor products. The company plans to meaningfully enter the e-vapor category by the end of 2019 and expand in 2020, after raising production capacity.

Peer comparisons

For 2019, analysts expect Altria to post revenue of $19.85 billion, which represents a rise of 1.1% from $19.6 billion in 2018.

Next in this series, we’ll look at analysts’ EPS expectations for 2019.


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