How Will Philip Morris Perform In Q2 2016?

+17.61%
Upside
91.91
Market
108
Trefis
PM: Philip Morris logo
PM
Philip Morris

Philip Morris is set to announce its second quarter results on July 19th, 2016.

PM Q2 2016 Consensus

Key Trends Expected In The Quarter:

1) High Exposure To A Strong Dollar

  • As the company is US based, deriving all its revenues from international sales, it is highly exposed to the strength of the Dollar.
  • The company derives 40% of its revenues from Europe, with 30% coming from the European Union.
  • While the Dollar fell against the Euro during the past several months, as a result of the announcement of a delay in the interest rate hike by the Fed, it has risen significantly once the Brexit was declared.
  • Moreover, the company is also exposed to the Australian Dollar and Canadian Dollar, which have been weak due to low commodity prices.
  • Japanese Prime Minister Shinzo Abe has also driven the weakening of the Japanese Yen which has helped the exporters.

US Dollar Index.png

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.
  • The prospects of iQOS, its reduced risk HeatStick product, look bright and should foster growth in the future.
  • Since its September launch in Japan, iQOS has grabbed 3.4% of the market share in Tokyo, and 2.4% in the overall expansion area there, with a conversion rate of over 50%.
  • Besides Japan, iQOS has also been launched in key cities of Italy and Switzerland, and city launches have also been commenced in Bucharest, Lisbon, and Moscow.
  • The company expects iQOS to be present in key cities in around 20 markets by the end of 2016.
Relevant Articles
  1. Should You Pick Philip Morris Stock After 7% Fall This Year And Q4 Miss?
  2. Will Philip Morris Stock Rebound After A 10% Fall This Year?
  3. After 8% Drop This Year, Pricing Growth To Bolster Philip Morris’ Q3
  4. Pricing Gains To Drive Philip Morris’ Q2?
  5. Does Philip Morris Stock Have Upside Potential To Its Pre-Inflation Peak?
  6. Here’s What To Expect From Philip Morris’ Q1

PM iQOS Japan

Have more questions on Philip Morris? See the links below:

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Philip Morris International.
View Interactive Institutional Research (Powered by Trefis):
Global Large CapU.S. Mid & Small CapEuropean Large & Mid Cap
More Trefis Research