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Philip Morris (PM) Readies for Q2 Earnings: Things to Note
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Philip Morris International Inc. (PM - Free Report) is likely to register top-line growth when it reports second-quarter 2023 earnings on Jul 20. The Zacks Consensus Estimate for revenues is pegged at $8,688 million, suggesting growth of 10.9% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for the bottom line has declined by a penny in the past seven days to $1.47 per share. The projection indicates a decrease of 0.7% from the figure reported in the year-ago period quarter. Philip Morris has a trailing four-quarter earnings surprise of 10.4%, on average.
Factors to Consider
Philip Morris has been benefiting from its strong pricing power, which has aided 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.
Philip Morris International Inc. Price, Consensus and EPS Surprise
Higher pricing variance was an upside to the company’s performance (mainly due to increased combustible tobacco pricing) in the first quarter of 2023. The continuation of this trend is likely to aid results in the second quarter.
With reduced-risk products (RRPs) gaining popularity, Philip Morris is also benefiting from its business transformation, with smoke-free products generating 34.9% of the company’s net revenues in the first quarter of 2023. PM is well-placed toward becoming a majority smoke-free company by 2025. To this end, the company’s IQOS, a heat-not-burn device, counts among one of the leading RRPs in the industry.
Total IQOS users at the end of the first quarter were estimated at roughly 25.8 million (of which nearly 18.5 million had switched to IQOS and stopped smoking). For 2023, management expects heated tobacco unit (HTU) shipment volumes of 125-130 billion units. These factors bode well for the quarter to be reported.
However, cigarette volumes, in general, have been affected by consumers’ rising health consciousness and a shift to low-risk tobacco alternatives. In 2023, the total international industry volume is estimated to decline by 1-2%, excluding China and the United States. Total cigarette and HTU shipment volume growth is likely to come in the range of around flat to an increase of 1%.
Apart from this, the company has been battling cost-related headwinds for a while now. In the first quarter of 2023, the adjusted operating income tumbled 10.7% on an organic basis due to elevated marketing, administration and research costs, an adverse volume/mix and escalated manufacturing costs, partly compensated by favorable pricing variance. Management expects certain margin pressures in the first half of 2023.
What the Zacks Model Unveils
Our proven model predicts 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 the case here.
Philip Morris has an Earnings ESP of +0.69% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks With the Favorable Combination
Here are three other companies you may want to consider as our model shows that these also have the right combination of elements to post an earnings beat:
The Zacks Consensus Estimate for Beyond Meat’s quarterly revenues is pegged at roughly $111.3 million, calling for a decline of 24.3% from the prior-year quarter’s reported figure. The Zacks Consensus Estimate for the bottom line is pegged at a loss of 81 cents, which suggests a rise of 47.1% from the figure reported in the year-ago fiscal quarter. BYND has a trailing four-quarter negative earnings surprise of 14.1%, on average.
Coty (COTY - Free Report) currently has an Earnings ESP of +38.47% and a Zacks Rank #2. The company’s top and bottom lines are expected to increase year over year when it reports fourth-quarter fiscal 2023 results. The Zacks Consensus Estimate for Coty’s quarterly revenues is pegged at $1.3 billion, which implies a rise of 13.1% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for the quarterly EPS is pegged at 1 cent, which indicates 200% growth from the year-ago period figure. COTY has a trailing four-quarter earnings surprise of 145%, on average.
Kraft Heinz Company (KHC - Free Report) currently has an Earnings ESP of +1.00% and a Zacks Rank #3. The company’s top and bottom lines are expected to increase year over year when it reports second-quarter 2023 results. The Zacks Consensus Estimate for Kraft Heinz’s quarterly revenues is pegged at $6.8 billion, which implies a rise of 4.3% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for the quarterly EPS is pegged at 75 cents, which indicates a 7.1% increase from the year-ago period figure. KHC has a trailing four-quarter earnings surprise of 10.7%, on average.
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Philip Morris (PM) Readies for Q2 Earnings: Things to Note
Philip Morris International Inc. (PM - Free Report) is likely to register top-line growth when it reports second-quarter 2023 earnings on Jul 20. The Zacks Consensus Estimate for revenues is pegged at $8,688 million, suggesting growth of 10.9% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for the bottom line has declined by a penny in the past seven days to $1.47 per share. The projection indicates a decrease of 0.7% from the figure reported in the year-ago period quarter. Philip Morris has a trailing four-quarter earnings surprise of 10.4%, on average.
Factors to Consider
Philip Morris has been benefiting from its strong pricing power, which has aided 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.
Philip Morris International Inc. Price, Consensus and EPS Surprise
Philip Morris International Inc. price-consensus-eps-surprise-chart | Philip Morris International Inc. Quote
Higher pricing variance was an upside to the company’s performance (mainly due to increased combustible tobacco pricing) in the first quarter of 2023. The continuation of this trend is likely to aid results in the second quarter.
With reduced-risk products (RRPs) gaining popularity, Philip Morris is also benefiting from its business transformation, with smoke-free products generating 34.9% of the company’s net revenues in the first quarter of 2023. PM is well-placed toward becoming a majority smoke-free company by 2025. To this end, the company’s IQOS, a heat-not-burn device, counts among one of the leading RRPs in the industry.
Total IQOS users at the end of the first quarter were estimated at roughly 25.8 million (of which nearly 18.5 million had switched to IQOS and stopped smoking). For 2023, management expects heated tobacco unit (HTU) shipment volumes of 125-130 billion units. These factors bode well for the quarter to be reported.
However, cigarette volumes, in general, have been affected by consumers’ rising health consciousness and a shift to low-risk tobacco alternatives. In 2023, the total international industry volume is estimated to decline by 1-2%, excluding China and the United States. Total cigarette and HTU shipment volume growth is likely to come in the range of around flat to an increase of 1%.
Apart from this, the company has been battling cost-related headwinds for a while now. In the first quarter of 2023, the adjusted operating income tumbled 10.7% on an organic basis due to elevated marketing, administration and research costs, an adverse volume/mix and escalated manufacturing costs, partly compensated by favorable pricing variance. Management expects certain margin pressures in the first half of 2023.
What the Zacks Model Unveils
Our proven model predicts 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 the case here.
Philip Morris has an Earnings ESP of +0.69% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks With the Favorable Combination
Here are three other companies you may want to consider as our model shows that these also have the right combination of elements to post an earnings beat:
Beyond Meat (BYND - Free Report) currently has an Earnings ESP of +14.6% and a Zacks Rank of 2. BYND is expected to register a top-line decrease when it reports second-quarter 2023 numbers. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Beyond Meat’s quarterly revenues is pegged at roughly $111.3 million, calling for a decline of 24.3% from the prior-year quarter’s reported figure. The Zacks Consensus Estimate for the bottom line is pegged at a loss of 81 cents, which suggests a rise of 47.1% from the figure reported in the year-ago fiscal quarter. BYND has a trailing four-quarter negative earnings surprise of 14.1%, on average.
Coty (COTY - Free Report) currently has an Earnings ESP of +38.47% and a Zacks Rank #2. The company’s top and bottom lines are expected to increase year over year when it reports fourth-quarter fiscal 2023 results. The Zacks Consensus Estimate for Coty’s quarterly revenues is pegged at $1.3 billion, which implies a rise of 13.1% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for the quarterly EPS is pegged at 1 cent, which indicates 200% growth from the year-ago period figure. COTY has a trailing four-quarter earnings surprise of 145%, on average.
Kraft Heinz Company (KHC - Free Report) currently has an Earnings ESP of +1.00% and a Zacks Rank #3. The company’s top and bottom lines are expected to increase year over year when it reports second-quarter 2023 results. The Zacks Consensus Estimate for Kraft Heinz’s quarterly revenues is pegged at $6.8 billion, which implies a rise of 4.3% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for the quarterly EPS is pegged at 75 cents, which indicates a 7.1% increase from the year-ago period figure. KHC has a trailing four-quarter earnings surprise of 10.7%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.