01—Abstract
Summary
Summary of the 10-Q filed May 6, 2011. Cited figures are marked; the original filing is the authoritative source.
Philip Morris International Inc. (PM) reported its first-quarter 2011 financial results, demonstrating robust top-line growth and improved profitability.
Net revenues increased by 6.0% to $16.53 billiona, driven by strong pricing across all segments and favorable currency movements. Net earnings attributable to PMI rose by 12.7% to $1.92 billion, translating to a 17.8% increase in diluted earnings per share (EPS) to $1.06. The company's operational performance was solid, with total cigarette volume up 1.6% year-over-year, largely propelled by significant growth in the Asian market, particularly Indonesia and the Philippines, and a favorable impact from the Philippines business combination.
Despite some volume declines in the European Union and EEMA regions due to market dynamics and geopolitical factors, the overall volume growth, combined with strategic pricing actions and efficient cost management, contributed to a substantial increase in operating income. The company also reiterated its positive outlook for the full year 2011, raising its diluted EPS forecast.
02—Key points
Key Highlights
- Net revenues increased by 6.0% to $16.53 billion, driven by price increases and favorable currency.
- Net earnings attributable to PMI grew by 12.7% to $1.92 billion.
- Diluted Earnings Per Share (EPS) increased by 17.8% to $1.06.
- Total cigarette volume increased by 1.6% to 207.92 billion units, with notable growth in Asia.
- Operating income saw a substantial increase of 10.8% to $3.01 billion.
- The company raised its full-year 2011 diluted EPS forecast to a range of $4.55 to $4.65.
- Cost of sales decreased by 3.2% due to volume/mix and currency movements.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2011, Philip Morris International Inc. kept $0.12.
- Revenue$16.53B100.0%
- Cost of revenue−$12.03B72.8%
- Gross profit$4.50B27.2%
- Operating costs−$1.49B9.0%
- Operating income$3.01B18.2%
- Interest, other & tax−$1.09B6.6%
- Net income$1.92B11.6%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2011filed May 6, 2011Financial Statements
Q1 FY2011 against Q1 FY2010
| Line item | Q1 FY2011Q1 FY2010 | Change |
|---|---|---|
| Revenue | $16.53B$15.59B | +6.0% |
| Cost of Revenue | $2.29B$2.37B | −3.2% |
| Gross Profit | $4.50B$4.12B | +9.0% |
| Operating Income | $3.01B$2.71B | +10.8% |
| Net Income | $1.92B$1.70B | +12.7% |
| EPS (Basic) | $1.06$0.90 | +17.8% |
| EPS (Diluted) | $1.06$0.90 | +17.8% |
| Shares Outstanding (Basic) | 1.79B1.87B | −4.3% |
| Shares Outstanding (Diluted) | 1.79B1.88B | −4.5% |
05—Questions
Frequently Asked Questions
What was the primary driver for the increase in net revenues?
The primary drivers for the increase in net revenues were price increases across all segments, favorable currency movements, and the impact of acquisitions, particularly the business combination in the Philippines. These factors more than offset the impact of lower volume/mix in certain regions.
How did the company manage costs in the quarter?
Cost of sales decreased by 3.2% due to favorable volume/mix and currency movements, partially offset by the impact of acquisitions. Marketing, administration, and research costs increased by 4.3%, primarily due to higher expenses and currency impacts.
What is the outlook for the full year 2011?
Philip Morris International raised its full-year 2011 reported diluted EPS forecast to a range of $4.55 to $4.65, indicating confidence in continued growth, driven by business outlook improvements and favorable currency trends.
What segment contributed most significantly to revenue growth?
The Asia segment showed the most significant growth in net revenues, increasing by 20.4% to $4.29 billion, driven by strong price increases, favorable currency, and the impact of the Philippines business combination. This segment also saw a substantial increase in operating companies income.
06—Continue