Philip Morris International (NYSE:PM), the world’s leading international tobacco company outside of the U.S. and China recently gave a presentation at Morgan Stanley’s Global Consumer & Retail Conference where it raised its 2011 EPS guidance for the third time to at least $4.85. PMI recently released its Q3 results, posting an impressive 12.6% growth as far as Asia’s volume goes. Although European sales volume continued to decline, the firm’s dominant market share in the premium segment, with trends of higher pricing ensured robust operating income. Philip Morris International competes with British American Tobacco (AMEX:BTI), Japan Tobacco (PNK:JAPAF.PK) and Imperial Tobacco Group plc (LSE:IMT) in its various geographical segments.
3Q Recap: Expanding volume in Asian market provides upside, Pricing key driver in Europe
Asia continued to remain the growth engine for PMI, with strong cigarettes volume growth in Indonesia, Philippines, Korea and Japan. This led to an overall increase in international volume of 4.4%, despite the 3.5% volume decline in Europe. The growth in volume has also help boost the company’s market share in its top 30 markets which is now over 36%. In Japan alone PMI expects to have 28.5% of overall market share.
Despite the sales decline, operating income in Europe was not impacted significantly as the region has a strong presence in the premium cigarettes segment which allows for higher pricing. PMI has again announced price increase of EUR 0.30 per pack across its cigarette portfolio in Europe. Read more - Asia Still Loves to Light Up Driving Philip Morris’ Growth
We have a revised $75.31 price estimate for Philip Morris International, 8% ahead of the market price.