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Philip Morris Beats Earnings Expectations — How’s the Outlook?

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Cigarette and tobacco manufacturing company Philip Morris released its third-quarter earnings on Tuesday, Oct. 20 before the markets opened. The company's earnings call is scheduled for 9:00 a.m. ET. Did the company beat market expectations? How did Philip Morris's stock price react to the earnings? How’s the outlook for the stock based on the earnings?  

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When did Philip Morris report its earnings?

Philip Morris reported its third-quarter earnings on Oct. 20 before the markets opened at 7:00 a.m. ET. The company beat its earnings estimates. Philip Morris is scheduled to hold a conference call to discuss the results at 9:00 a.m. ET. 

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After strong second-quarter results, investors expected strong third-quarter earnings as well and the company didn’t disappoint. 

Highlights from Philip Morris's earnings report

Philip Morris’s third-quarter earnings beat Wall Street's estimates. The company's adjusted EPS was $1.42, which was 4.4 percent higher than the consensus estimate of $1.36. The adjusted revenues for the quarter were $7.45 billion, which also exceeded the consensus estimate of $7.28 billion by 2.3 percent. Philip Morris has been beating or meeting the market's consensus earnings estimates for the past several quarters.

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Philip Morris CEO André Calantzopoulos commented on the results. He said, “We delivered stronger-than-anticipated results in the third quarter, despite the ongoing challenges of the pandemic, with adjusted diluted EPS growth of 5.6 percent on an organic basis.”

The better-than-expected results were mainly due to the sustained momentum of IQOS, which is a new tobacco heating system. The company also saw “better underlying total industry volumes across both developed and emerging markets.” To reflect the improved environment, the company raised its full-year EPS guidance. Now, Philip Morris expects its full-year EPS to grow by 5 percent to 6 percent compared to 3.5 percent to 5 percent previously. 

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What is Philip Morris's stock price today?

Philip Morris’s stock price has declined by about 8 percent year-to-date. While this is a worse performance compared to the broader market, Altria has lost 20 percent of the stock value during the same period.

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Philip Morris stock has a 52-week range of $56.01–$90.17, which implies that the stock is trading 12.2 lower than its 52-week high and 41.3 percent higher than its 52-week low. The stock closed at $77.98 on Oct. 19 and lost 1.63 percent. In pre-market trading on Oct. 20 at 7:52 a.m. ET, the stock was trading in the green with 0.21 percent gains at $78. Investors are likely waiting for the earnings call and management's outlook to turn more constructive on the stock.

How is Philip Morris's dividend?

Philip Morris pays a regular annual dividend. For 2020, the company increased the dividend by 2.6 percent to $4.8 per year.  At the current market price, the dividend yield is 6.2 percent. For the previous 11 years, Philip Morris increased its dividend by an average of 3.9 percent every year. 

Philip Morris's stock forecast

Currently, 18 analysts cover Philip Morris stock. Among the analysts, nine recommend a buy, while nine recommend a hold. None of the analysts recommend a sell. The average target price of $90.25 implies a potential upside of 15.7 percent. 

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