Philip Morris International Inc. Quarterly Report for Q1 Ended Mar 31, 2013

Summary

Philip Morris International Inc. (PM) reported its first-quarter results for 2013, showing a slight increase in net revenues to $18.5 billion, up 2.8% year-over-year, driven by price increases which offset a decline in shipment volumes. Diluted earnings per share (EPS) also saw a modest increase to $1.28, up 2.4% from $1.25 in the prior year, despite an unfavorable currency impact. The company's strategic focus remains on pricing power and managing costs, with a full-year EPS forecast of $5.55 to $5.65, indicating expected growth. The balance sheet shows a robust cash position of nearly $4 billion, though the company also carries significant long-term debt. Operating income saw a slight decrease due to unfavorable volume/mix, currency fluctuations, and higher operating costs, partially offset by the positive impact of price increases. Management is focused on productivity initiatives and a substantial share repurchase program, signaling confidence in future performance and commitment to returning capital to shareholders.

Key Highlights

• 1Net revenues increased by 2.8% to $18.5 billion, primarily driven by price increases that offset a 6.5% decline in cigarette shipment volume.
• 2Diluted Earnings Per Share (EPS) rose to $1.28 from $1.25 in the prior year, representing a 2.4% increase, despite a $0.07 unfavorable currency impact.
• 3The company maintains a strong liquidity position with $3.98 billion in cash and cash equivalents as of March 31, 2013.
• 4Operating income saw a slight decrease of 0.5% to $3.39 billion, impacted by unfavorable volume/mix, currency, and higher operating costs, partially mitigated by price increases.
• 5Philip Morris International revised its full-year 2013 diluted EPS forecast to $5.55-$5.65, indicating anticipated growth and a significant share repurchase target of $6.0 billion for the year.
• 6The Asia segment experienced a 10.4% decrease in cigarette shipment volume, largely attributed to a disruptive excise tax increase in the Philippines.
• 7The company's long-term debt increased to $20.8 billion from $17.6 billion, reflecting new debt issuances to support working capital, share repurchases, and general corporate purposes.

Frequently Asked Questions