Philip Morris International beats by $0.17, beats on revs; issues FY14 guidance (84.70)
Reports Q2 (Jun) earnings of $1.41 per share, excluding non-recurring items, $0.17 better than the Capital IQ Consensus Estimate of $1.24; revenues fell 1.5% year/year to $7.8 bln vs the $7.51 bln consensus.
- Co issues guidance for FY14, sees EPS ex items of +6-8% calc to ~$5.72-5.83, may not be comparable to $5.15 Capital IQ Consensus Estimate.
- FY14 Guidance: This adjustment reflects: an after-tax charge of $0.01 per share recorded as asset impairment and exit costs in the first quarter of 2014 relating to the decision to cease cigarette production in Australia by the end of 2014; a pre-tax charge, related to the decision to discontinue cigarette production in the Netherlands in 2014, of $488 million, or an after-tax charge of $0.24 per share, recorded as asset impairment and exit costs in the second quarter of 2014; and an unfavorable currency impact, at prevailing exchange rates, of approximately $0.61 for the full-year 2014.
- Cigarette shipment volume of 222.8 billion units, down by 2.7%.
- Net revenues of $2.3 billion decreased by 14.2%, including unfavorable currency of $285 million. Excluding currency, net revenues decreased by 3.6%, due primarily to: unfavorable volume/mix of $138 million, mainly due to Japan, principally reflecting a lower total market and share; partially offset by favorable pricing of $42 million, driven mainly by Australia and Indonesia, despite the adverse impact of the Philippines.
- "For the second half of this year, we anticipate more challenging quarterly comparisons, particularly in the fourth quarter -- which, in 2013, saw currency-neutral adjusted diluted earnings per share grow by 19.4% -- due to known business challenges, particularly in Asia, the timing of investments behind the commercialization of our Reduced-Risk Products and the roll-out of Marlboro Red 2.0, as well as costs related to our manufacturing footprint optimization initiatives."