Philip Morris beats Q3 estimates but warns global conflicts are clouding its earnings outlook (Oct 21)
What happened
Philip Morris International reported Q3 adjusted EPS of $2.36 (vs. ~$2.30 expected) on revenue of $11.4 billion (up 5.5%, above the $11.32 billion consensus), with strong cigarette demand in Turkey and Indonesia and Zyn pouch shipments up 4.2% to 3.2 billion units in the U.S. But management said global conflicts are starting to hurt: the Middle East war's energy-related inflation is having an 'increasing effect' on its cost base, expected to intensify in Q4, and weapons strikes in Ukraine have disrupted its supply-chain and logistics infrastructure, with the company expecting continued pressure on operating income this year. 'The long-term situation remains unpredictable, and it is difficult to assess the broader implications for consumers or the global cost environment,' the company said. It tweaked full-year adjusted EPS guidance to $8.29–$8.44 (from $8.26–$8.41), with analysts at $8.36 per FactSet. Shares were down about 1–3% in premarket trading.
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Start your free 14-day trialWho’s affected
- Philip Morris (PM) — direct hit: energy-driven input costs and Ukraine supply-chain strikes weighing on operating income
- Consumer staples — PM is an S&P 500 defensive bellwether; its cost-inflation warning flags margin risk across multinationals with Middle East/Ukraine exposure
- British American Tobacco (BTI) — sector read-through on Zyn-competitor Velo and shared energy/freight cost pressures
Sources