Philip Morris International Inc. (PM - Free Report) reported fourth-quarter 2019 results on Feb 6, before market open. Earnings met estimates while revenues topped the same. Since the earnings release, Philip Morris’ shares have gained about 4.2% (read: Will Virus Infect Q1 Earnings? Multi-Asset ETFs to Play).
Q4 in Detail
Philip Morris reported adjusted earnings per share (EPS) of $1.22, on par with the Zacks Consensus Estimate. However, the bottom line declined 2.4% year over year. After excluding currency, the bottom line rose 4.3%.
Net revenues of $7.71 billion surpassed the Zacks Consensus Estimate of $7.68 billion. Moreover, the top line rose 2.9% year over year. Furthermore, the metric increased 6.3% at constant currency (cc) on favorable pricing across most regions partly negated by adverse volume/mix.
Adjusted operating income went up 6% year over year to $2.86 billion.
The company’s total cigarette and heated tobacco unit shipment volume fell 5% to 192.2 billion units. While cigarette shipment volume declined 8% to 175.1 billion units in the fourth quarter, heated tobacco unit shipment volume of almost 17.1 billion units reflected a year-over-year rise of 40.7%.
Shipment volumes in the Eastern Europe rose 1.2% year over year. Meanwhile, there was a decline in shipment volumes in the European Union, Middle East & Africa, South & Southeast Asia and East Asia & Australia and Latin America & Canada regions.
Philip Morris envisions adjusted EPS of $5.50 for 2020. Excluding the expected currency impact of 4 cents, earnings are anticipated to be at least $5.54, which indicates growth of at least 8% from the year-ago quarter’s reported figure.Further, management expects effective tax rate for 2020 to be roughly 23%.
Some consumer staples ETFs with significant exposure to Philip Morris seemed to have gained since its earnings release.
Vanguard Consumer Staples ETF (VDC - Free Report)
This fund is one of the most popular funds in the Consumer Staples sector of the United States. It has AUM of $5.70 billion and charges a fee of 10 basis points a year. From a sector-look, Household products, Soft drinks and Packaged Foods & Meats have the highest exposure to the fund, with 22.7%, 20.8% and 17.4% allocation, respectively. It has 4.4% exposure to Philip Morris.
The fund has returned 17% in a year. Since the earnings release, the fund has gained about 0.3%. VDC has a Zacks ETF Rank #1 (Strong Buy), with a Medium risk outlook (read: Consumer Staples' ETFs Hitting New Highs).
Fidelity MSCI Consumer Staples Index ETF (FSTA - Free Report)
This fund offers exposure to the Consumer Staples sector of the United States at a very low expense ratio. It has AUM of $621.1 million and charges a fee of 8 basis points a year. From an industry-exposure look, Beverages, Household Products and Food & Staples Retailing have the highest exposure to the fund, with 25.6%, 22.7% and 20.6% allocation, respectively. It has a 6.34% exposure to Philip Morris. The fund has returned 18.2% in a year.
Since the earnings release, the fund has gained about 0.5%. FSTA has a Zacks ETF Rank #1 with a Medium risk outlook.
iShares U.S. Consumer Goods ETF (IYK - Free Report)
This ETF tracks the Dow Jones U.S. Consumer Goods Index, giving investors exposure to the broad Consumer Staples space. It has AUM of $543.1 million and charges a fee of 42 basis points a year. From a sector-look, Food Beverage Tobacco, Household & Personal Products and Consumer Durables have the highest exposure to the fund, with 44.9%, 21.8% and 15.6% allocation, respectively. It has an exposure of 5.58% to Philips Morris.
The fund has returned 19.4% in a year. However, the fund has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. Since the earnings release, the fund has gained about 0.04% (see all Consumer Staples ETFs here).
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