Philip Morris Climbs After Earnings Beat Even as Cigarettes Wane
(Bloomberg) -- Philip Morris International Inc. rose after shipments of the company’s mission-critical IQOS device came in above estimates, even as cigarette sales continue to taper off.
- The tobacco giant reported earnings per share for the fourth quarter that beat the highest analyst estimate.
- Philip Morris’s push to move cigarette smokers onto its “heat not burn” device IQOS means that’s now a key metric for investors, especially as cigarette smoking rates continue to decline. It shipped 12.2 billion heated tobacco units in the latest quarter, more than a Wells Fargo analyst had expected. Cigarette shipment volume fell 3.1 percent.
- With IQOS already sold in more than 40 countries, Philip Morris is waiting for the U.S. Food & Drug Administration to decide whether it can be sold stateside. Meantime, competition is ramping up. Altria Group Inc., which is supposed to sell IQOS in the U.S. if approved, has taken a significant stake in upstart Juul Labs Inc., and has said it plans to take its competing U.S. vaping device to international markets.
- Investors were watching whether IQOS growth can continue to accelerate in Philip Morris’ biggest market, Japan. It cited lower heated tobacco unit shipment volume in Japan, a potentially worrying sign, but said higher volumes in Korea helped offset that in the region. Europe was also a strong spot for device sales.
- Philip Morris shares rose as much as 4.1 percent in New York trading on Thursday. The stock had already gained 13 percent this year through Wednesday’s close, outpacing the performance of the S&P 500 Index.
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