01—Abstract
Summary
Summary of the 10-Q filed August 3, 2012. Cited figures are marked; the original filing is the authoritative source.
Philip Morris International Inc. (PM) reported its financial results for the second quarter and the first six months of 2012.
For the six-month period, net revenues increased by 3.5% to $38.1 billiona, driven by price increases and favorable volume/mix, despite an unfavorable currency impact. Operating income saw a 4.3% increase to $7.0 billion. Net earnings attributable to PMI rose by 3.5% to $4.5 billion, resulting in diluted EPS of $2.60, up 7.4% year-over-year.
The company reaffirmed its full-year 2012 reported diluted EPS forecast of $5.10 to $5.20b. For the three-month period, net revenues saw a slight decrease of 1.0% to $20.0 billion, primarily due to unfavorable currency and volume/mix, partially offset by price increases. Operating income decreased by 2.9% to $3.6 billion.
Net earnings attributable to PMI decreased by 3.8% to $2.3 billionc, leading to diluted EPS of $1.36, a 0.7% increase year-over-year. The company continues to navigate complex global markets, with growth driven by pricing and operational efficiencies, while managing the impacts of currency fluctuations and evolving regulatory landscapes.
02—Key points
Key Highlights
- For the six months ended June 30, 2012, net revenues increased 3.5% to $38.06 billion, driven by price increases and favorable volume/mix.
- Operating income for the six months increased 4.3% to $7.01 billion.
- Net earnings attributable to PMI for the six months increased 3.5% to $4.48 billion, resulting in diluted EPS of $2.60, up 7.4% from $2.42 in the prior year.
- For the three months ended June 30, 2012, net revenues decreased 1.0% to $20.04 billion, impacted by unfavorable currency and volume/mix, partly offset by price increases.
- Operating income for the three months decreased 2.9% to $3.60 billion.
- Net earnings attributable to PMI for the three months decreased 3.8% to $2.32 billion, resulting in diluted EPS of $1.36, up 0.7% from $1.35 in the prior year.
- Philip Morris International reaffirmed its 2012 full-year reported diluted EPS forecast to be in a range of $5.10 to $5.20.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2012, Philip Morris International Inc. kept $0.12.
- Revenue$20.04B100.0%
- Cost of revenue−$14.58B72.8%
- Gross profit$5.45B27.2%
- Operating costs−$1.85B9.2%
- Operating income$3.60B18.0%
- Interest, other & tax−$1.29B6.4%
- Net income$2.32B11.6%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2012filed August 3, 2012Financial Statements
Q2 FY2012 against Q2 FY2011
| Line item | Q2 FY2012Q2 FY2011 | Change |
|---|---|---|
| Revenue | $20.04B$20.23B | −1.0% |
| Cost of Revenue | $2.67B$2.84B | −6.3% |
| Gross Profit | $5.45B$5.43B | +0.5% |
| Operating Income | $3.60B$3.71B | −2.9% |
| Net Income | $2.32B$2.41B | −3.8% |
| EPS (Basic) | $1.36$1.35 | +0.7% |
| EPS (Diluted) | $1.36$1.35 | +0.7% |
| Shares Outstanding (Basic) | 1.70B1.77B | −4.0% |
| Shares Outstanding (Diluted) | 1.70B1.77B | −4.0% |
05—Questions
Frequently Asked Questions
What was the year-over-year performance for net revenues and earnings for the six months ended June 30, 2012?
For the six months ended June 30, 2012, Philip Morris International Inc. reported net revenues of $38.06 billion, an increase of 3.5% compared to $36.76 billion in the same period of 2011. Net earnings attributable to PMI increased by 3.5% to $4.48 billion, up from $4.33 billion in the prior year. Diluted earnings per share (EPS) were $2.60, a 7.4% increase from $2.42 in the prior year.
How did currency fluctuations impact the company's financial results in the reported periods?
Currency movements had an unfavorable impact on net revenues. For the six months ended June 30, 2012, currency movements decreased net revenues by $2.0 billion, and net revenues excluding excise taxes by $494 million. For the three months ended June 30, 2012, currency movements decreased net revenues by $1.4 billion, and net revenues excluding excise taxes by $402 million. The unfavorable impact was primarily due to movements in the Argentine peso, Brazilian real, Euro, Indonesian rupiah, Polish zloty, Russian ruble, and Turkish lira, partially offset by gains from the Japanese yen and Swiss franc.
What is the company's outlook for the full year 2012?
Philip Morris International reaffirmed its 2012 full-year reported diluted EPS forecast to be in a range of $5.10 to $5.20, compared to $4.85 in 2011. The company also expects a total unfavorable currency impact of approximately $0.27 per share for the full year. On a currency-neutral basis, reported diluted EPS in 2012 are projected to increase by approximately 10% to 12% versus adjusted diluted EPS of $4.88 in 2011.
What were the main drivers of the increase in operating income for the six-month period?
The increase in operating income for the six months ended June 30, 2012, was primarily driven by price increases ($832 million), partially offset by unfavorable currency ($264 million), higher marketing, administration, and research costs ($254 million), and unfavorable volume/mix ($21 million).
06—Continue