10-QPeriod: Q1 FY2012

Philip Morris International Inc. Quarterly Report for Q1 Ended Mar 31, 2012

Filed May 4, 2012For Securities:PM

Summary

Philip Morris International Inc. (PM) reported strong financial results for the first quarter of 2012, with net revenues of $18.02 billion, 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 $1.25. 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 $5.30, indicating confidence in its continued performance.

Financial Highlights

52 data points
Beta

Revenue

$18.02B

27.8% Gross Margin

Net Income

$2.16B

12.0% Net Margin

EPS (Diluted)

$1.25

Total Assets

$36.40B

Cash & Equivalents

$3.58B

Free Cash Flow

$1.67B

Financial Statements
Beta
Revenue$18.02B
Cost of Revenue$2.44B
Gross Profit$5.01B
Operating Income$3.40B
Net Income$2.16B
EPS (Basic)$1.25
EPS (Diluted)$1.25
Shares Outstanding (Basic)1.72B
Shares Outstanding (Diluted)1.72B

Key Highlights

  • 1Net revenues increased by 9.0% to $18.02 billion, driven by price increases and favorable volume/mix.
  • 2Net earnings attributable to PMI rose by 12.6% to $2.16 billion.
  • 3Diluted EPS grew by 17.9% to $1.25.
  • 4Total cigarette shipment volume increased by 5.4% to 219.1 billion units, with significant growth in Asia and EEMA.
  • 5The company repurchased approximately $1.5 billion of its common stock during the quarter.
  • 6PMI reiterated its commitment to returning value to shareholders with dividends declared of $0.77 per share for the quarter.
  • 7The company revised its full-year 2012 EPS forecast to a range of $5.20 to $5.30.

Frequently Asked Questions

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.

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.

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%.

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.