Summary
Philip Morris International (PM) reported solid results for the nine months ended September 30, 2020, with diluted EPS increasing by 9.2% to $3.90. Net revenues for the period were $21.25 billion, a slight decrease of 3.8% compared to the prior year, primarily impacted by unfavorable currency movements and a decrease in combustible product net revenues. However, this was partially offset by a 20.6% increase in net revenues from Reduced-Risk Products (RRPs), driven by strong performance in the European Union and East Asia & Australia. The company's RRP portfolio, particularly its IQOS platform, continues to show significant growth and strategic importance, evidenced by the FDA's authorization of certain IQOS products as modified risk tobacco products. Despite ongoing challenges from COVID-19 and regulatory landscapes, PM's diversification into smoke-free alternatives demonstrates resilience and a forward-looking strategy. The company's operating income for the nine months increased by 9.2% to $8.76 billion, benefiting from favorable pricing and cost efficiencies, alongside a favorable comparison to significant one-off charges in the prior year. Geographically, the European Union segment showed robust growth in both net revenues and operating income, underscoring its importance. While combustible product volumes declined across most regions, the growth in heated tobacco units signals a successful strategic shift. PM's liquidity remains strong, with significant credit facilities available and no borrowings outstanding.
Financial Highlights
49 data points| Revenue | $7.45B |
| Cost of Revenue | $2.42B |
| Gross Profit | $5.03B |
| Operating Income | $3.24B |
| Net Income | $2.31B |
| EPS (Basic) | $1.48 |
| EPS (Diluted) | $1.48 |
| Shares Outstanding (Basic) | 1.56B |
| Shares Outstanding (Diluted) | 1.56B |
Key Highlights
- 1Diluted EPS increased by 9.2% to $3.90 for the nine months ended September 30, 2020.
- 2Net revenues decreased by 3.8% to $21.25 billion for the nine months ended September 30, 2020, primarily due to unfavorable currency and lower combustible product sales.
- 3Reduced-Risk Products (RRPs) net revenues increased by 20.6% for the nine months ended September 30, 2020, driven by strong performance in the EU and East Asia & Australia.
- 4Operating income increased by 9.2% to $8.76 billion for the nine months ended September 30, 2020, benefiting from favorable pricing and cost management.
- 5The European Union segment showed strong growth, with net revenues up 7.8% and operating income up 17.3% for the nine months.
- 6Heated Tobacco Units (HTUs) shipment volume increased by 27.9% for the nine months ended September 30, 2020, indicating growing consumer adoption.
- 7Philip Morris International received FDA authorization for certain IQOS products as modified risk tobacco products, a significant step for its RRP strategy.