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Tickers in this Article: PM
Philip Morris International (NYSE:PM) will announce its third quarter earnings on Thursday, October 18, 2012.

A business' earnings are the main determinant of its share price because earnings and the circumstances relating to them can indicate whether the business will be profitable and successful in the long run. SEE: Can Earnings Guidance Accurately Predict The Future?

What to Expect: Analysts are expecting Philip Morris to report earnings of $1.39 per share, up 1.5% from a year ago, when the company reported earnings of $1.37 per share.

For the fiscal year, analysts are projecting earnings of $5.19 per share.

Philip Morris is expected to report revenue of $8.25 billion for the quarter, down by 1.3% from last year's figure of $8.36 billion. Revenue for the fiscal year is expected to come in at $31.68 billion.

Company Performance: Revenue has risen for four consecutive quarters now. It rose more than twofold in the second quarter, more than twofold in the first quarter, 9% in the fourth quarter of the last fiscal year and 26.4% in the third quarter of the last fiscal year.

PM has a P/E ratio of 18.2, high compared to the industry average of 16.67. A company with a high P/E ratio will eventually have to live up to the high rating by substantially increasing its earnings, or the price will need to drop. A simple P/E ratio can reveal the stock's real market value and show how the valuation compares to its industry group or a benchmark like the S&P 500 Index. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: Understanding The P/E Ratio

Over the past quarter, the stock price has risen to $91.70 from $89.99 on July 17, 2012. Philip Morris' best recent streak was when its price gained $3.80 per share between September 28, 2012 and October 5, 2012.

The Competition: Philip Morris International is the holding company whose subsidiaries and affiliates manufacture and sell cigarettes and other tobacco products in markets outside the U.S. The majority of analysts (10 of 13) give Philip Morris a buy rating. This rating hasn't changed in three months.

The company's closest competitor in the tobacco industry is British American (BTI). Analysts are more optimistic about Philip Morris than about British American. Only two out of three analysts rate the latter a buy.

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