Philip Morris International Inc. (PM) trimmed its 2012 earnings outlook on Thursday, as it did in April, to reflect prevailing currency movements. Excluding currency impacts, the tobacco giant's growth forecast remains unchanged.
For the full year, the owner of Marlboro, Parliament and Virginia Slims brands of cigarettes currently projects earnings per share to be in a range of $5.10 to $5.20 in prevailing exchange rates, compared to its April forecast of $5.20 to $5.30 per share. Both ranges are higher than last year's earnings of $4.85 per share.
The company now expects unfavorable currency to drag its earnings by $0.25 per share, higher than the $0.15 per share impact expected previously.
Excluding currency fluctuations, Philip Morris continues to project earnings to grow about 10 to 12 percent from last year's adjusted earnings per share of $4.88.
On average, 19 analysts polled by Thomson Reuters expect the company to earn $5.23 per share. Analysts' estimates typically exclude special items.
In May, brokerage Nomura trimmed the company's full-year forecast, assuming that strong growth from Indonesia could be more than offset by slowdown in other key markets such as South Korea, Japan, Philippines and Mexico throughout the year.
"The growing significance of Asia (most notably Indonesia) is a risk should there be a slowdown or yearly volatility. Although Asia is a growth engine for PMI, with the threat of increased regulation, in addition to potential volatility, which is often seen in Asian markets from year to year, we feel these risks have not been priced in," Nomura noted.
The tobacco company's senior management plans to discuss the business outlook and long-term growth strategies at a two-day investor meeting starting today in Switzerland. In the meeting, Chairman and CEO Louis Camilleri will outline the mid to long-term growth prospects for the business.
In a separate statement, Philip Morris said it will contribute 15 million euros to INTERPOL to support the agency's global initiative to combat trans-border crime involving illicit goods, including tobacco products.
Philip Morris shares closed Wednesday's regular trading session at $88.51, down $0.01 or 0.01 percent.
In Pre-market activity, shares are losing $0.61 or 0.69 percent and currently trading at $87.90.
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