Analysts expect Philip Morris International (PM) to post revenue of $6.74 billion in the first quarter, which represents a fall of 2.3% from $6.90 billion in the first quarter of 2018.
The decline in Philip Morris’s cigarette shipment volumes is expected to lower its revenue during the quarter. However, some of the decline is likely to be offset by favorable pricing and growth in its heated tobacco sales.
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Philip Morris has launched IQOS in 54 key markets across five out of its six regions. At the end of the fourth quarter of 2018, the company had ~9.6 million IQOS users. Its management stated that of these ~9.6 million IQOS users, ~6.6 million (70%) had completely switched to IQOS, while ~3 million were in the process of switching. In 2018, IQOS generated $4 billion in sales, accounting for ~14.0% of the company’s total revenue.
Philip Morris launched the next generation of IQOS devices, the IQOS 3 and IQOS MULTI, in mid-November. The company’s management stated that the early response from customers had been positive. At the end of 2018, Philip Morris also launched the mid-priced HEETS brand. These initiatives are expected to drive Philip Morris’s revenue in the first quarter.
During the comparable quarter, Altria Group (MO) is expected to post revenue of $4.61 billion, which represents a fall of 1.4% from its revenue of $4.67 billion in the first quarter of 2018.
For 2019, analysts expect Philip Morris to post revenue of $30.19 billion, which represents a rise of 1.9% from $29.63 billion in 2018. Growth in heated tobacco unit sales and favorable pricing are expected to drive the company’s revenue.