Philip Morris International Inc. Reports Robust Full-Year Earnings Growth
Reported Diluted EPS: $5.02 for full-year 2023, down 13.6% from 2022.
Adjusted Diluted EPS: $6.01 for full-year 2023, representing an 11.0% increase on a currency-neutral basis.
Net Revenues: $35.2 billion in 2023, up 10.7% from the previous year.
Smoke-Free Product Net Revenues: $12.8 billion, a 26.0% increase year-over-year.
Operating Income: $11.6 billion, a decrease of 5.6% from 2022.
Total Cigarette and HTU Shipment Volume: 1.0% growth in 2023, with HTUs up by 14.7%.
2024 Full-Year Forecast: Projected adjusted diluted EPS growth of 7.0% to 9.0%, excluding currency.
On February 8, 2024, Philip Morris International Inc (NYSE:PM) announced its fourth-quarter and full-year results for 2023, revealing a mix of growth and challenges in its latest 8-K filing. The company, known for its extensive portfolio of cigarettes and reduced-risk products, including heat-not-burn, vapor, and oral nicotine products, has been diversifying its offerings. Following the acquisition of Swedish Match in 2022 and Vectura in 2021, PM is expanding beyond traditional tobacco and nicotine products.
Financial Performance and Challenges
Philip Morris International Inc (NYSE:PM) reported a full-year reported diluted EPS of $5.02, a 13.6% decrease from the previous year. However, the adjusted diluted EPS was $6.01, reflecting an 11.0% growth on a currency-neutral basis. The company's net revenues for 2023 reached $35.2 billion, a 10.7% increase from 2022, with smoke-free products contributing significantly to this growth. Smoke-free product net revenues saw a substantial 26.0% year-over-year increase, accounting for approximately 36.5% of total net revenues.
Despite the growth in smoke-free products, the company's operating income declined by 5.6% to $11.6 billion. This decrease was attributed to various factors, including supply chain disruptions and the impact of the ILUMA product introduction. Total cigarette and heated tobacco unit (HTU) shipment volume grew by 1.0%, with HTUs experiencing a notable 14.7% increase.
Income Statement and Balance Sheet Highlights
Philip Morris International Inc (NYSE:PM) faced a challenging year with a decrease in operating income and reported diluted EPS. However, the company's adjusted operating income showed resilience with a 3.7% organic increase, driven by the performance of smoke-free products. The adjusted diluted EPS growth, excluding currency, was primarily due to organic growth in adjusted operating income and the strong performance of the Swedish Match business, particularly ZYN in the U.S.
The company's balance sheet reflects the strategic acquisitions made in recent years, aimed at diversifying its product portfolio and reducing reliance on traditional cigarettes. The growth in smoke-free product revenues is a testament to the company's successful shift towards reduced-risk products.
2024 Outlook and Analysis
Looking ahead to 2024, Philip Morris International Inc (NYSE:PM) forecasts a reported diluted EPS in the range of $5.90 to $6.02, with an expected increase of 7.0% to 9.0% for adjusted diluted EPS, excluding currency. The company anticipates continued growth in smoke-free product net revenues and operating income.
Philip Morris International Inc (NYSE:PM)'s performance in 2023 demonstrates the company's ability to navigate a complex market environment while continuing to grow its smoke-free product segment. The company's strategic focus on reduced-risk products and diversification beyond nicotine products positions it well for future growth, despite the challenges faced in traditional tobacco markets.
For a detailed analysis of Philip Morris International Inc (NYSE:PM)'s financial results and future outlook, investors and interested parties are encouraged to review the full 8-K filing.
Explore the complete 8-K earnings release (here) from Philip Morris International Inc for further details.
This article first appeared on GuruFocus.
