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Sep 30, 2020
Philip Morris Q3 2020 Earnings Report
Reported diluted EPS increased and full-year reported diluted EPS forecast raised.
Key Takeaways
Philip Morris International Inc. reported stronger-than-anticipated results in the third quarter, with adjusted diluted EPS growth of 5.6% on an organic basis. The sustained momentum of IQOS was excellent, with an estimated 16.4 million total users at the end of September and smoke-free products accounting for nearly one-fourth of total net revenues in the quarter.
Reported diluted EPS of $1.48, up by 21.3%; up by 28.7%, excluding currency.
Adjusted diluted EPS of $1.42, down by 0.7%; up by 5.6% on an organic basis.
Cigarette and heated tobacco unit shipment volume down by 7.6% (reflecting cigarette shipment volume down by 9.8%, and heated tobacco unit shipment volume up by 18.7% to 19.0 billion units).
Total IQOS users at quarter-end estimated at approximately 16.4 million, of which approximately 11.7 million have stopped smoking and switched to IQOS.
Revenue by Geographic Location
Forward Guidance
PMI raises its full-year 2020 reported diluted EPS forecast to a range of $5.03 to $5.08, at prevailing exchange rates.
Positive Outlook
- No recurrence of national lockdowns in PMI's key international markets during the remainder of 2020.
- Lack of near-term recovery in PMI's duty-free business given the uncertain outlook for global travel, with current dynamics persisting at least through year end.
- Full enforcement of minimum retail selling price requirements in Indonesia by the end of 2020, at the earliest.
- An estimated total international industry volume decline, excluding China and the U.S., of approximately 7% to 8%.
- A total cigarette and heated tobacco unit shipment volume decline for PMI of approximately 8% to 9% on a like-for-like basis.
Challenges Ahead
- An effective tax rate, excluding discrete tax events, of 22% to 23%, compared to approximately 22% assumed previously.
- Capital expenditures of approximately $0.6 billion, compared to approximately $0.7 billion assumed previously.
Revenue & Expenses
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Avg. Return Before/After Earnings
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