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Philip Morris (PM) Set to Report Q4 Earnings: What to Know?
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Philip Morris International Inc. (PM - Free Report) is likely to register a decline in the top and bottom lines when it reports fourth-quarter 2022 earnings on Feb 9. The Zacks Consensus Estimate for revenues is pegged at $7,442 million, suggesting a drop of 8.2% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for the fourth-quarter bottom line has gone down from $1.32 per share to $1.29 in the past 30 days. The projection indicates a decline of 4.4% from the year-ago quarter’s reported figure. Philip Morris has a trailing four-quarter earnings surprise of 9.9%, on average. This tobacco giant reported an earnings surprise of 10.9% in the last reported quarter.
Philip Morris International Inc. Price, Consensus and EPS Surprise
PM has been battling cost-related headwinds for a while now. In the third quarter of 2022, the proforma adjusted operating income margin was affected by investments related to expanding IQOS ILUMA, the elevated initial cost of ILUMA devices and related heated tobacco units or HTUs, supply-chain constraints (mainly due to the Ukraine war) and global cost inflation.
For 2022, proforma adjusted operating margin growth on an organic basis is likely to come in the range of a decline of 50 basis points to flat. The gross margin is expected to be lower due to a considerable rise in IQOS device volumes (with supply restrictions easing), the increased initial cost of IQOS ILUMA, elevated logistic costs, growth-oriented investments in the smoke-free space, raw material and energy cost inflation and incremental supply-chain costs. These factors and low cigarette volumes raise concerns for the fourth quarter.
However, a continued product mix shift from cigarettes to smoke-free products is likely to have been an upside. Philip Morris is progressing well with its business transformation, with smoke-free products generating more than 30% of the company’s net revenues in the third quarter of 2022.
The company has also been benefiting from its strong pricing power, which has been aiding its revenues and adjusted operating income. Though higher pricing might lead to a possible decline in cigarette consumption, it is seen that smokers tend to absorb price increases due to the addictive quality of cigarettes.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Philip Morris this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is not the case here.
Philip Morris sports a Zacks Rank #1 and has an Earnings ESP of -3.26%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are three companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Performance Food Group Company (PFGC - Free Report) has an Earnings ESP of +0.39% and a Zacks Rank #3. The Zacks Consensus Estimate for its fourth-quarter 2022 earnings is pegged at 76 cents, calling for 33.3% growth from the year-ago period figure. PFGC has a trailing four-quarter earnings surprise of 15.2%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus mark for Performance Food’s top line is pegged at $13.9 billion, suggesting growth of 8.4% from the prior-year quarter’s reported figure.
Freshpet, Inc. (FRPT - Free Report) is likely to register top and bottom-line growth when it reports fourth-quarter 2022 results. FRPT has an Earnings ESP of +2.04% and a Zacks Rank #3. The Zacks Consensus Estimate for Freshpet’s bottom line has remained unchanged at a loss of 8 cents in the past 30 days compared with a loss of 21 cents reported in the year-ago period.
FRPT has a trailing four-quarter negative earnings surprise of roughly 88%, on average. The consensus mark for Freshpet’s top line is pegged at $151.1 million, calling for growth of 30.4% from the prior-year quarter’s reported figure.
Kellogg Company (K - Free Report) currently has an Earnings ESP of +4.12% and a Zacks Rank of 3. K is expected to register a top-line improvement when it reports fourth-quarter 2022 numbers.
The Zacks Consensus Estimate for Kellogg's quarterly revenues is pegged at $3.7 billion, calling for growth of nearly 7% from the prior-year quarter’s reported figure. The Zacks Consensus Estimate for the quarterly EPS of 84 cents suggests a 1.2% increase from the figure reported in the year-ago fiscal quarter. K has a trailing four-quarter earnings surprise of 10.6%, on average.
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Philip Morris (PM) Set to Report Q4 Earnings: What to Know?
Philip Morris International Inc. (PM - Free Report) is likely to register a decline in the top and bottom lines when it reports fourth-quarter 2022 earnings on Feb 9. The Zacks Consensus Estimate for revenues is pegged at $7,442 million, suggesting a drop of 8.2% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for the fourth-quarter bottom line has gone down from $1.32 per share to $1.29 in the past 30 days. The projection indicates a decline of 4.4% from the year-ago quarter’s reported figure. Philip Morris has a trailing four-quarter earnings surprise of 9.9%, on average. This tobacco giant reported an earnings surprise of 10.9% in the last reported quarter.
Philip Morris International Inc. Price, Consensus and EPS Surprise
Philip Morris International Inc. price-consensus-eps-surprise-chart | Philip Morris International Inc. Quote
Factors to Consider
PM has been battling cost-related headwinds for a while now. In the third quarter of 2022, the proforma adjusted operating income margin was affected by investments related to expanding IQOS ILUMA, the elevated initial cost of ILUMA devices and related heated tobacco units or HTUs, supply-chain constraints (mainly due to the Ukraine war) and global cost inflation.
For 2022, proforma adjusted operating margin growth on an organic basis is likely to come in the range of a decline of 50 basis points to flat. The gross margin is expected to be lower due to a considerable rise in IQOS device volumes (with supply restrictions easing), the increased initial cost of IQOS ILUMA, elevated logistic costs, growth-oriented investments in the smoke-free space, raw material and energy cost inflation and incremental supply-chain costs. These factors and low cigarette volumes raise concerns for the fourth quarter.
However, a continued product mix shift from cigarettes to smoke-free products is likely to have been an upside. Philip Morris is progressing well with its business transformation, with smoke-free products generating more than 30% of the company’s net revenues in the third quarter of 2022.
The company has also been benefiting from its strong pricing power, which has been aiding its revenues and adjusted operating income. Though higher pricing might lead to a possible decline in cigarette consumption, it is seen that smokers tend to absorb price increases due to the addictive quality of cigarettes.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Philip Morris this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is not the case here.
Philip Morris sports a Zacks Rank #1 and has an Earnings ESP of -3.26%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are three companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Performance Food Group Company (PFGC - Free Report) has an Earnings ESP of +0.39% and a Zacks Rank #3. The Zacks Consensus Estimate for its fourth-quarter 2022 earnings is pegged at 76 cents, calling for 33.3% growth from the year-ago period figure. PFGC has a trailing four-quarter earnings surprise of 15.2%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus mark for Performance Food’s top line is pegged at $13.9 billion, suggesting growth of 8.4% from the prior-year quarter’s reported figure.
Freshpet, Inc. (FRPT - Free Report) is likely to register top and bottom-line growth when it reports fourth-quarter 2022 results. FRPT has an Earnings ESP of +2.04% and a Zacks Rank #3. The Zacks Consensus Estimate for Freshpet’s bottom line has remained unchanged at a loss of 8 cents in the past 30 days compared with a loss of 21 cents reported in the year-ago period.
FRPT has a trailing four-quarter negative earnings surprise of roughly 88%, on average. The consensus mark for Freshpet’s top line is pegged at $151.1 million, calling for growth of 30.4% from the prior-year quarter’s reported figure.
Kellogg Company (K - Free Report) currently has an Earnings ESP of +4.12% and a Zacks Rank of 3. K is expected to register a top-line improvement when it reports fourth-quarter 2022 numbers.
The Zacks Consensus Estimate for Kellogg's quarterly revenues is pegged at $3.7 billion, calling for growth of nearly 7% from the prior-year quarter’s reported figure. The Zacks Consensus Estimate for the quarterly EPS of 84 cents suggests a 1.2% increase from the figure reported in the year-ago fiscal quarter. K has a trailing four-quarter earnings surprise of 10.6%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.