Philip Morris International Q1 2015 Earnings Report
Philip Morris International (NYSE:PM) recently reported its first quarter 2015 results; below we discuss the company’s market share changes in its three key regions and the results from the test launch of its reduced risk products. The EEMA, Asia and Europe regions were in focus on the company’s earnings call due to its market share growth there. This helped increase revenues – excluding currency impacts – by 9.1% and adjusted operating companies income by 16.3% year on year in Q1 2015. The reduced risk products are of a longer term significance, since they are believed to be the future of the tobacco industry.
We have a price estimate for Philip Morris of around $79, slightly lower than the market price.
See Our Complete Analysis For Philip Morris International
- Should You Pick Philip Morris Stock After 7% Fall This Year And Q4 Miss?
- Will Philip Morris Stock Rebound After A 10% Fall This Year?
- After 8% Drop This Year, Pricing Growth To Bolster Philip Morris’ Q3
- Pricing Gains To Drive Philip Morris’ Q2?
- Does Philip Morris Stock Have Upside Potential To Its Pre-Inflation Peak?
- Here’s What To Expect From Philip Morris’ Q1
Russia Outperformance Drives EEMA Results
The Eastern Europe, Middle East and Africa region was the largest contributor to the currency neutral results of the company in Q1 2015. Russia was the best performing market here, with a volume market share gain of 0.9 percentage points. A strong brand portfolio helped drive price increases as well. The combined impact of these two trends was double digit growth in the operating companies income in the region.
Market Share Gain In Europe Continues
In Q1 2015, the company made a volume market share gain of 0.4 percentage points in Europe. This was due to the excellent performance of the brands Marlboro, L&M and Chesterfield. They were the top three cigarette industry brands in the region by volume. Combined with price increases in most markets along with improvements in the volume mix in Southern Europe, this helped grow the the market share by revenue of the company in Europe. [1] As a result, the operating companies’ income excluding currencies and acquisitions grew by 12.9%.
Mixed Results In Asia
Asia, Indonesia, Japan and the Philippines contribute 78% of the shipment volume of Philip Morris’ cigarettes. [2] In Japan, new product launches helped stem market share losses last year. These launches under the Marlboro and Lark brands were supplemented with marketing campaigns such as the Be Marlboro campaign. The company has promised further new launches under these two brands this year, the first of which was the Marlboro Fusion Blast, a menthol cigarette launched in Q1 2015. [3] In Q1 2015, however, the company saw its market share decline moderately due to competitive brand launches. The launch of the Marlboro 2.0 campaign is expected to help the company retain and enhance its market share in Japan going forward.
RRP Roll Outs Exceed Expectation
There were also insights with respect to the performance of its reduced risk products (RRPs) in the Q1 2015 earnings call. They were launched in Nagoya in Japan and Milan in Italy in 2014. The consumer reception to the roll out was described by the company as exceeding their expectations.
View Interactive Institutional Research (Powered by Trefis):
Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap | More Trefis Research
Notes: