Philip Morris International Inc (NYSE: PM) reported market-beating results for its fiscal Q1 on Thursday despite a hit to its business due to the Ukraine war. Shares are up 2.0% today.
Philip Morris first quarter financial highlights
Net income printed at $2.331 billion versus the year-ago figure of $2.418 billion.
Per-share earnings of $1.50 in the first quarter were below last year’s $1.55.
Adjusted EPS came in at $1.56, as per the earnings press release.
Revenue saw an annualised growth of 2.1% to $7.746 billion in Q1.
FactSet consensus was for $1.49 of adjusted EPS on $7.585 billion in revenue.
According to Philip Morris, the Ukraine war resulted in 10 cents of hit to its earnings in Q1 ($1.46 a share on pro forma basis). It slashed its 2022 guidance announcing plans of exiting Russia altogether.
The stock that now trades at a PE multiple of 17.99 has gained nearly 20% since March 11th.
Highlights from CEO Olczak’s interview on CNBC
For the full financial year, Philip Morris now forecasts its adjusted per-share earnings to fall between $5.45 and $5.56. Analysts had expected a higher $5.89. On CNBC’s “Squawk on the Street”, CEO Jacek Olczak said:
Russia and Ukraine contributed about 8.0% to our revenue last year. So, they have a material, significant contribution. But we’re very pleased that other parts of the business are contributing to the strong growth.
Despite geopolitical tensions, inflationary and supply pressures, Philip Morris expects a 100 bps increase in its operating margin this year. Speaking with CNBC’s Morgan Brennan, Olczak reiterated the company’s commitment to non-combustible business.
We delivered a spectacular growth on non-combustible business (double-digit growth). We’re reaching a 30% plus of our total revenue from smoke-free products, despite headwinds. We’re aim for 50% of revenue coming from these products by 2025.
Lastly, things are getting better on the pricing front, the chief executive confirmed.
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