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Mar 31, 2021
Philip Morris Q1 2021 Earnings Report
Reported strong results driven by IQOS and revised full-year reported diluted EPS forecast.
Key Takeaways
Philip Morris International Inc. reported a strong start to the year with first-quarter results exceeding expectations, driven by the strength of IQOS. The company has raised its full-year outlook to reflect the positive momentum, anticipating organic adjusted diluted EPS growth of 11% to 13%.
Reported diluted EPS of $1.55, up by 32.5%; up by 23.9%, excluding currency.
Adjusted diluted EPS of $1.57, up by 29.8%; up by 21.5% on an organic basis.
Cigarette and heated tobacco unit shipment volume down by 3.7%, reflecting cigarette shipment volume down by 7.3%, and heated tobacco unit shipment volume up by 29.9% to 21.7 billion units.
Net revenues up by 6.0%; up by 2.9% on an organic basis, with smoke-free products accounting for 28.0% of total net revenues.
Revenue by Geographic Location
Forward Guidance
PMI revises its full-year reported diluted EPS forecast to a range of $5.93 to $6.03, representing a projected increase of around 15% to 17% versus reported diluted EPS of $5.16 in 2020. On an organic basis, this forecast represents a projected increase of around 11% to 13% versus adjusted diluted EPS of $5.17 in 2020.
Positive Outlook
- Better underlying business performance driven by the strength of IQOS, particularly in the EU Region and Japan.
- A favorable currency impact, at prevailing exchange rates, of approximately $0.20 per share, compared to approximately $0.25 per share previously.
- Strong organic net revenue growth, partly driven by a favorable comparison versus the second quarter of 2020.
- Continued improvement in adjusted operating income margin on an organic basis.
- The assumption that many of PMI's key markets will have largely emerged from pandemic-related restrictions.
Challenges Ahead
- Asset impairment and exit costs of $0.02 per share resulting from product distribution restructuring in Korea and organizational design optimization.
- Lack of near-term recovery in PMI's duty-free business given the uncertain outlook for global travel, with current dynamics persisting through year end.
Revenue & Expenses
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Historical Earnings Impact
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Avg. Return Before/After Earnings
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