Philip Morris International Inc. Quarterly Report for Q3 Ended Sep 30, 2015

Summary

Philip Morris International Inc. (PM) reported its third-quarter and nine-month results for the period ending September 29, 2015. For the nine months, net revenues decreased by 7.7% to $55.5 billion, impacted by unfavorable currency movements and a slight decline in cigarette shipment volume. Operating income also saw a decrease of 4.9% to $8.7 billion, affected by currency headwinds, lower volume/mix, and increased operating expenses, partially offset by price increases and the non-recurrence of prior-year asset impairment and exit costs. For the three months, net revenues fell by 9.0% to $19.4 billion, also impacted by currency and volume/mix declines, though price increases provided some offset. Operating income decreased by 11.5%. The company revised its full-year 2015 diluted EPS forecast to $4.35-$4.40, reflecting improved business outlook and currency impacts. Despite these challenges, the company's strong pricing power and focus on operating efficiencies supported its financial performance, and it maintained a significant market share across its diverse geographic segments.

Key Highlights

• 1Net revenues for the nine months ended September 30, 2015, decreased by 7.7% to $55.5 billion, primarily due to unfavorable currency impacts and a slight decrease in cigarette shipment volume.
• 2Operating income for the nine months decreased by 4.9% to $8.7 billion, impacted by currency headwinds, lower volume/mix, and higher operating expenses.
• 3Diluted EPS for the nine months was $3.62, a decrease from $3.73 in the prior year, with currency movements being a significant factor.
• 4The company revised its full-year 2015 reported diluted EPS forecast to a range of $4.35 to $4.40.
• 5PMI's market share increased in several key markets across its segments, demonstrating brand strength despite overall volume pressures.
• 6Significant investments were made in Reduced-Risk Products (RRPs), with the iQOS system undergoing commercialization efforts in various markets.
• 7The company maintained strong liquidity with $2.4 billion in cash and cash equivalents and fully available committed credit facilities totaling $8.0 billion at the end of the quarter.

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