Summary
Philip Morris International (PM) reported a net revenue increase of 3.1% to $29.6 billion for the fiscal year ended December 31, 2018. This growth was primarily driven by favorable pricing across key markets and a significant increase in heated tobacco unit (HTU) volume, particularly in the European Union. Diluted Earnings Per Share (EPS) saw a substantial increase of 30.9% to $5.08, largely attributed to the positive impact of the U.S. Tax Cuts and Jobs Act of 2017, which reduced the company's effective tax rate, and lower interest expenses due to debt optimization. The company continues its strategic transformation towards a smoke-free future with its Reduced-Risk Products (RRPs), notably IQOS, which saw a 14.2% increase in shipment volume. Despite the overall positive financial performance, the company faces ongoing challenges related to declining cigarette consumption in many markets and increasing regulatory scrutiny across the industry.
Financial Highlights
50 data points| Revenue | $29.63B |
| Cost of Revenue | $10.76B |
| Gross Profit | $18.87B |
| R&D Expenses | $383.00M |
| Operating Income | $11.38B |
| Interest Expense | $855.00M |
| Net Income | $7.91B |
| EPS (Basic) | $5.08 |
| EPS (Diluted) | $5.08 |
| Shares Outstanding (Basic) | 1.55B |
| Shares Outstanding (Diluted) | 1.55B |
Key Highlights
- 1Net revenues increased by 3.1% to $29.6 billion in 2018, driven by favorable pricing and a rise in heated tobacco unit (HTU) shipments.
- 2Diluted EPS grew by 30.9% to $5.08, significantly impacted by the U.S. Tax Cuts and Jobs Act and improved capital structure management.
- 3Heated Tobacco Unit (HTU) shipments increased by 14.2% year-over-year, indicating growing adoption of the IQOS product line.
- 4The company's total international market share, including cigarettes and HTUs, grew slightly to 28.4% in 2018.
- 5Net revenues from Reduced-Risk Products (RRPs) reached $4.1 billion in 2018, up from $3.6 billion in 2017.
- 6Operating income saw a slight decrease of 1.8% to $11.4 billion, negatively impacted by unfavorable currency movements and increased marketing, administration, and research costs, particularly for RRPs.