Will Philip Morris Beat Expectations This Earnings Season?
Key Trends In The Quarter:
1) High Exposure To Foreign Currency Fluctuations
- As the company is U.S. based, deriving all its revenues from international sales, it is highly exposed to fluctuations in the Dollar.
- There was a fairly significant impact of $1.20 to the reported earnings in 2015.
- Fortunately, the currency situation has improved, with the Dollar weakening against the Japanese Yen and the Euro.
2) Popularity Of iQOS And Other Reduced Risk Products (RRPs)
- According to Philip Morris, RRPs are products that have the potential to reduce individual risk and population harm by users.
- The company has spent $2B to date working on its RRPs.
- Harmful constituents and chemical toxicity was reduced by over 90% in iQOS.
- Since its September launch in Japan, iQOS has grabbed 2.4% of the market share in Tokyo, and 1.6% in the overall expansion area there, with a conversion rate of over 50%.
- Target of 3-5% share in the current markets, leading to $720M – $1.2B additional margins by 2020.
- With launches in other markets, the upside is even more attractive.
Have more questions on Philip Morris? See the links below:
- How Did Philip Morris Perform In The European Union, And Its Key Markets There, In 2015?
- How Did Philip Morris Perform In Russia, Given The Currency Headwinds And Excise Tax Rise?
- How Has Philip Morris Fared In Comparison To Its Peers?
- How Has Philip Morris’ Shipment Volume, By Brand, Changed Over The Past 3 Years?
- How Has Philip Morris’ Revenue And EBITDA Composition Changed In The Last 5 Years?
- How Will Philip Morris’ Revenue And EBITDA Change In The Next 3 Years?
- Philip Morris: Year 2015 In Review
- By What Percentage Did Philip Morris’ Revenue & EBITDA Change In The Last 5 Years?
- What is Philip Morris’ Fundamental Value Based On Expected 2016 Results?
- What is Philip Morris’ Revenue And EBITDA Breakdown?
- 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
Notes:
Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap
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