01—Abstract
Summary
Summary of the 10-Q filed May 4, 2012. Cited figures are marked; the original filing is the authoritative source.
Philip Morris International Inc. (PM) reported strong financial results for the first quarter of 2012, with net revenues of $18.02 billiona, an increase of 9.0% year-over-year, and net earnings attributable to PMI of $2.16 billion, up 12.6%.
Diluted earnings per share (EPS) rose by 17.9% to $1.25b. The company's performance was driven by favorable volume/mix and price increases across its key segments, particularly in Asia and Eastern Europe, Middle East & Africa. Despite a challenging global economic environment and ongoing regulatory pressures in the tobacco industry, PM successfully navigated currency headwinds and increased operating income.
The company also continued its robust share repurchase program, demonstrating a commitment to returning value to shareholders. The company revised its full-year 2012 EPS forecast to a range of $5.20 to $5.30c, indicating confidence in its continued performance.
02—Key points
Key Highlights
- Net revenues increased by 9.0% to $18.02 billion, driven by price increases and favorable volume/mix.
- Net earnings attributable to PMI rose by 12.6% to $2.16 billion.
- Diluted EPS grew by 17.9% to $1.25.
- Total cigarette shipment volume increased by 5.4% to 219.1 billion units, with significant growth in Asia and EEMA.
- The company repurchased approximately $1.5 billion of its common stock during the quarter.
- PMI reiterated its commitment to returning value to shareholders with dividends declared of $0.77 per share for the quarter.
- The company revised its full-year 2012 EPS forecast to a range of $5.20 to $5.30.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2012, Philip Morris International Inc. kept $0.12.
- Revenue$18.02B100.0%
- Cost of revenue−$13.02B72.2%
- Gross profit$5.01B27.8%
- Operating costs−$1.60B8.9%
- Operating income$3.40B18.9%
- Interest, other & tax−$1.24B6.9%
- Net income$2.16B12.0%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2012filed May 4, 2012Financial Statements
Q1 FY2012 against Q1 FY2011
| Line item | Q1 FY2012Q1 FY2011 | Change |
|---|---|---|
| Revenue | $18.02B$16.53B | +9.0% |
| Cost of Revenue | $2.44B$2.29B | +6.4% |
| Gross Profit | $5.01B$4.50B | +11.3% |
| Operating Income | $3.40B$3.01B | +13.2% |
| Net Income | $2.16B$1.92B | +12.6% |
| EPS (Basic) | $1.25$1.06 | +17.9% |
| EPS (Diluted) | $1.25$1.06 | +17.9% |
| Shares Outstanding (Basic) | 1.72B1.79B | −4.1% |
| Shares Outstanding (Diluted) | 1.72B1.79B | −4.2% |
05—Questions
Frequently Asked Questions
What was the primary driver of Philip Morris International's revenue growth in Q1 2012?
Philip Morris International's revenue growth was primarily driven by price increases and favorable volume/mix across its key segments. Specifically, the Asia and Eastern Europe, Middle East & Africa (EEMA) segments showed strong performance contributing to the overall increase.
How did currency fluctuations impact Philip Morris International's results?
Currency movements had an unfavorable impact on net revenues, decreasing them by $587 million. The decrease in net revenues, excluding excise taxes, was $92 million, primarily due to the Argentine peso, Euro, Mexican peso, Polish zloty, Russian ruble, and Turkish lira. However, this was partially offset by the Japanese yen.
What is the company's outlook for the full year 2012?
Philip Morris International revised its full-year 2012 reported diluted EPS forecast to a range of $5.20 to $5.30, compared to $4.85 in 2011. Excluding a forecasted unfavorable currency impact of approximately $0.15, reported diluted EPS are projected to increase by 10% to 12%.
What is the company doing to return value to shareholders?
Philip Morris International continued its share repurchase program, repurchasing approximately $1.5 billion of common stock during the first quarter of 2012. Additionally, the company declared a dividend of $0.77 per common share for the quarter, reflecting a commitment to shareholder returns.
06—Continue