Philip Morris International Inc. Earnings Cheat Sheet: Margins Keep Growing, Net Income Climbs

S&P 500 (NYSE:SPY) component Philip Morris International Inc. (NYSE:PM) reported net income above Wall Street’s expectations for the third quarter. Philip Morris International is the holding company whose subsidiaries and affiliates manufacture and sell cigarettes and other tobacco products in markets outside the U.S.

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Philip Morris International Earnings Cheat Sheet for the Third Quarter

Results: Net income for Philip Morris International Inc. rose to $2.38 billion ($1.35 per share) vs. $1.82 billion (99 cents per share) in the same quarter a year earlier. This marks a rise of 30.5% from the year earlier quarter.

Revenue: Rose 26.4% to $8.36 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: PM reported adjusted net income of $1.37 per share. By that measure, the company beat the mean estimate of $1.23 per share. It beat the average revenue estimate of $7.57 billion.

Quoting Management: “While we benefited from a relatively undemanding comparison, our results this quarter were simply superb on each and every key performance measure. Our business in Japan was a key driver of our stellar results, but elsewhere we enjoyed very solid growth and improving trends in virtually all geographies,” said Louis C. Camilleri, Chairman and Chief Executive Officer. “It is heartening to witness that the efforts deployed by all our employees are being rewarded by such significant progress and continued strong momentum.”

Key Stats:

Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 0.6 percentage point to 66% from the year earlier quarter. Over that span, margins have grown on average 1.6 percentage points per quarter on a year-over-year basis.

The company has now seen net income rise in three straight quarters. In the second quarter, net income rose 21.5% and in the first quarter, the figure rose 12.7%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 13 cents in the second quarter, by 2 cents in the first quarter, and by one cent in the fourth quarter of the last fiscal year.

Revenue has risen the past four quarters. Revenue increased 17.2% to $8.27 billion in the second quarter. The figure rose 4.5% in the first quarter from the year earlier and climbed 4.8% in the fourth quarter of the last fiscal year from the year-ago quarter.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the fourth quarter has moved down from $1.13 a share to $1.09 over the last sixty days. For the fiscal year, the average estimate has moved up from $4.62 a share to $4.73 over the last ninety days.

Competitors to Watch: Altria Group, Inc. (NYSE:MO), Reynolds American, Inc. (NYSE:RAI), Lorillard Inc. (NYSE:LO), Vector Group Ltd. (NYSE:VGR), British American Tobacco (AMEX:BTI), Imperial Tobacco Group PLC (ITYBY), Star Scientific, Inc. (NASDAQ:CIGX), Alliance One Intl., Inc. (NYSE:AOI), and Universal Corporation (NYSE:UVV).

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(Source: Xignite Financials)