Philip Morris International (PM) has risen the most in five months after reporting earnings that easily topped analyst forecasts.
Bloomberg News Philip Morris International reported a profit $1.41 a share, beating forecasts for $1.24, on revenue of $7.8 billion, topping the Street consensus for $7.52 billion. Morgan Stanley’s David Adelman and team explain why investors are so enthusiastic about Philip Morris International’s results:
Our key take-away is that Q2 was considerably stronger than expected and given the absence of any new issues results in less risk to the company's full-year outlook…Although F/X was less onerous than our forecast ($0.06 of EPS favorability), the $0.18 quarterly EPS beat was predominantly driven by improved profitability in EEMA and Europe. While elevated spending and a difficult 4Q comparison should result in more moderate second half EPS growth, we continue to expect full-year results to be within PM's 6-8% currency neutral range…
Despite the same core issues remaining an ongoing concern – Japan, the Philippines, Australia, and Indonesia – we were encouraged by the lack of any emerging issues, following the recent pattern of disappointing guidance.
Shares of Philip Morris International has gained 1.7% to $86 at 1:08 p.m., while Altria Group (MO) has advanced 1.2% to $42.07, Lorillard (LO) has risen 2.1% to $61.25 and Reynolds American (RAI) is up 1.1% at $58.40.
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