Philip Morris Intl Earnings on the Horizon

S&P 500 (NYSE:SPY) component Philip Morris International (NYSE:PM) will unveil its latest earnings on Thursday, October 18, 2012. 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.

Philip Morris International Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of $1.39 per share, a rise of 1.5% from the company’s actual earnings for the same quarter a year ago. The average estimate is the same as three months ago. Between one and three months ago, the average estimate was unchanged. It also has not changed during the last month. For the year, analysts are projecting net income of $5.19 per share, a rise of 6.4% from last year.

Past Earnings Performance: Last quarter, the company beat estimates by 2 cents, coming in at profit of $1.36 a share versus the estimate of net income of $1.34 a share. It marked the fourth straight quarter of beating estimates.

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A Look Back: In the second quarter, profit fell 3.8% to $2.32 billion ($1.36 a share) from $2.41 billion ($1.35 a share) the year earlier, but exceeded analyst expectations. Revenue rose more than twofold to $20.04 billion from $8.27 billion.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 0.92 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, a ratio less than one could indicate a company may have difficulty meeting current obligations. The company regressed in this liquidity measure from 1.0 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 10.1% to $16.83 billion while assets rose 1.5% to $15.56 billion.

Stock Price Performance: From September 14, 2012 to October 12, 2012, the stock price rose $2.22 (2.5%), from $89.48 to $91.70. The stock price saw one of its best stretches over the last year between June 5, 2012 and June 19, 2012, when shares rose for 11 straight days, increasing 8.1% (+$6.61) over that span. It saw one of its worst periods between May 2, 2012 and May 9, 2012 when shares fell for six straight days, dropping 5.2% (-$4.67) over that span.

Key Stats:

The company is looking to get back on track with this earnings announcement after a profit drop last quarter snapped a positive string of results. Net income rose 30.5% in the third quarter of the last fiscal year, 7.6% in the fourth quarter of the last fiscal year and 12.6% in the first quarter before declining in the second quarter.

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 26.4% in the third quarter of the last fiscal year, 9% in the fourth quarter of the last fiscal year and more than twofold in the first quarter before increasing again in the second quarter.

The company’s gross margin shrank by 38.4 percentage points in the in the second quarter. Revenue rose 142.2% while cost of sales rose 412.8% to $14.58 billion from a year earlier.

Analyst Ratings: With 10 analysts rating the stock a buy, none rating it a sell and three rating the stock a hold, there are indications of a bullish stance by analysts.

Wall St. Revenue Expectations: Analysts are projecting a decline of 1.3% in revenue from the year-earlier quarter to $8.25 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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