Philip Morris Net Profit Surpassed the Experts' Estimates

Philip Morris International, which is the world’s biggest cigarette company, recently presented its third quarter revenue that surpassed experts’ estimates backed by significant shipments and increased cigarette prices in Asia.

Net profit increased 30% to $2.38 billion, or $1.35 per share, from $1.82 billion, or 99 cents, in comparison to 2010, according to the largest Marlboro maker PM representative in New York. Except some items, the revenue constituted $1.37 a share, exceeding the $1.24 average of 14 experts’ estimates gathered by Bloomberg.

Chief Executive Officer Louis Camilleri increased prices in Australia, Japan and Indonesia as the customer demand pushed the shipments higher by 4.5%. Without taking into account excise taxes, total sales of Philip Morris, which produces the main part of its revenue outside the U.S., raised 26% to $8.36 billion.

“Supported by Asia and the increasing markets, shipments demonstrated positive results, and they do not have any problems getting price increases. We rate the shares as “buy”. They blew by the agreement quite easily,” Jack Russo, an expert at Edward Jones & Co. in St. Louis, stated in an interview.

The tobacco company increased the bottom limit of its 2001 profit expected by 5 cents to $4.75 a share, and remained unchanged the top limit of $4.80. Experts forecast $4.74, the average of 16 estimates.

Philip Morris increased 3.3% to $68.19 at 4 p.m. in New York trade. According to statistics the shares have raised 17% this year.

As about Lorillard Inc., which is considered the third-largest U.S. cigarette producer, the results will be presented on October 31, followed by Reynolds American Inc.,-  the second tobacco company on November 3.
Philip Morris is the second most profitable company, according to Standard & Poor’s 500 Index, after Linear Technology Corporation, which produces and markets a wide range of integrated circuits.
The experts forecast equal weight to five variables, including price-cost margin and turnover on invested capital. Lorillard Inc. situated in Greensboro, North Carolina, ranked 10th.