Summary
Philip Morris International Inc. (PM) reported its first-quarter 2022 results, showing a slight increase in net revenues to $7.746 billion, up 2.1% from $7.585 billion in the prior year period. This growth was primarily driven by favorable pricing and an increase in reduced-risk product (RRP) net revenues, which grew 10.7% to $2.350 billion. However, diluted earnings per share (EPS) saw a slight decline to $1.50 from $1.55 in the first quarter of 2021, impacted by unfavorable currency movements and charges related to the war in Ukraine. The company also noted a significant increase in net cash provided by operating activities, rising to $1.118 billion from $435 million in the prior year, largely due to lower working capital requirements. The company's strategic shift towards reduced-risk products continues to be a key focus, with significant growth in heated tobacco units, particularly in the European Union. Management's strategic priorities remain centered on developing and commercializing products that present less risk of harm to smokers who switch and educating consumers about these alternatives. However, the ongoing war in Ukraine and its impact on operations in Russia and Ukraine are expected to have a material adverse impact on the business.
Financial Highlights
48 data points| Revenue | $7.75B |
| Cost of Revenue | $2.61B |
| Gross Profit | $5.14B |
| Operating Income | $3.30B |
| Net Income | $2.33B |
| EPS (Basic) | $1.50 |
| EPS (Diluted) | $1.50 |
| Shares Outstanding (Basic) | 1.55B |
| Shares Outstanding (Diluted) | 1.55B |
Key Highlights
- 1Net revenues increased by 2.1% to $7.746 billion, primarily driven by favorable pricing and growth in reduced-risk products.
- 2Diluted EPS decreased by 3.2% to $1.50, impacted by unfavorable currency movements and charges related to the war in Ukraine.
- 3Net cash provided by operating activities significantly increased to $1.118 billion, up from $435 million in the prior year, due to improved working capital management.
- 4Reduced-risk product (RRP) net revenues grew by 10.7% to $2.350 billion, with strong performance in heated tobacco units (HTUs) in the EU.
- 5The company announced an intention to exit the Russian market and has temporarily suspended operations in Ukraine due to the war, which is expected to have a material adverse impact.
- 6PMI acquired the remaining stakes in its Turkish subsidiaries, now owning 100% ownership.
- 7The company continues its share repurchase program, buying back 2.0 million shares for $199 million in Q1 2022.