Philip Morris International Inc. (NYSE / Euronext Paris: PM) today announced its 2017 second-quarter results.


“Our quarterly results were robust with, as expected, sequential improvement in our volume performance, as well as strong currency-neutral net revenue growth of 7% versus last year,” said André Calantzopoulos, Chief Executive Officer.

“IQOS, our flagship smoke-free alternative, continues to perform exceptionally well, supported by further recent successful market launches, notably in Korea. In the quarter, shipments of Marlboro HeatSticks represented over 40% of our total shipments in Japan, where we recorded a national share of 10%. To date, more than 2.9 million adult consumers have already stopped smoking and switched to IQOS.”

In the quarter, PMI’s total shipment volume of cigarettes and heated tobacco units decreased by 5.0%, principally due to: Asia, notably Indonesia, as well Pakistan and the Philippines, reflecting ongoing declines of primarily low-margin cigarette volumes; and EEMA. The net impact of inventory movements in the quarter was immaterial.

PMI’s cigarette volume decreased by 7.5% due to: the EU, principally Germany and Spain, partly offset by France; EEMA, mainly Russia, Saudi Arabia, mainly reflecting the implementation of a new excise tax, Turkey and Ukraine, partly offset by North Africa; and Asia, principally Indonesia, Japan, Pakistan and the Philippines. The decline was partly offset by growth in Latin America & Canada, principally Mexico.

The decline in PMI’s cigarette shipment volume was partly offset by higher heated tobacco unit shipment volume of 6.4 billion units, up from 1.2 billion units in the second quarter of 2016, driven by Japan.

Year-to-date, PMI’s total shipment volume of cigarettes and heated tobacco units decreased by 7.1%, or by 6.3% excluding net estimated inventory movements, principally due to: Asia, notably Indonesia, as well as Pakistan and the Philippines, reflecting ongoing declines of primarily low-margin cigarette volumes; and EEMA.

PMI’s cigarette volume decreased by 9.4% due to: the EU, principally Italy and Spain, partly offset by Poland; EEMA, reflecting declines across the Region, notably Russia and Ukraine; Asia, principally Indonesia, Japan, Pakistan and the Philippines; and Latin America & Canada, principally Argentina, Brazil and Canada.

The decline in PMI’s cigarette shipment volume was partly offset by higher heated tobacco unit shipment volume of 10.8 billion units, up from 1.6 billion units in the first six months of 2016, driven by Japan.

Reported diluted earnings per share of $1.14, down by $0.01 or 0.9% versus $1.15 in 2016
Excluding unfavorable currency of $0.11, reported diluted earnings per share up by $0.10 or 8.7% versus $1.15 in 2016 as detailed in the attached Schedule 13
Adjusted diluted earnings per share of $1.14, down by $0.01 or 0.9% versus $1.15 in 2016
Excluding unfavorable currency of $0.11, adjusted diluted earnings per share up by $0.10 or 8.7% versus $1.15 in 2016 as detailed in the attached Schedule 13
Total cigarette and heated tobacco unit shipment volume of 199.9 billion, down by 5.0%
Cigarette shipment volume of 193.5 billion units, down by 7.5%
Heated tobacco unit shipment volume of 6.4 billion units, up from 1.2 billion units in 2016
Reported net revenues of $19.3 billion, up by 1.5%
Net revenues, excluding excise taxes, of $6.9 billion, up by 4.0%
Excluding unfavorable currency of $195 million, net revenues, excluding excise taxes, up by 7.0% as detailed in the attached Schedule 10
Reported operating income of $2.7 billion, down by 1.2%
Operating companies income of $2.8 billion, down by 1.1%
Excluding unfavorable currency of $199 million, operating companies income up by 5.9% as detailed in the attached Schedule 10
Adjusted operating companies income, reflecting the items detailed in the attached Schedule 12, of $2.8 billion, down by 1.1%
Excluding unfavorable currency of $199 million, adjusted operating companies income up by 5.9% as detailed in the attached Schedule 12
2017 Six Months Year-to-Date

Reported diluted earnings per share of $2.17, up by $0.04 or 1.9% versus $2.13 in 2016
Excluding unfavorable currency of $0.11, reported diluted earnings per share up by $0.15 or 7.0% versus $2.13 in 2016 as detailed in the attached Schedule 17
Adjusted diluted earnings per share of $2.13 were flat versus 2016
Excluding unfavorable currency of $0.11, adjusted diluted earnings per share up by $0.11 or 5.2% versus $2.13 in 2016 as detailed in the attached Schedule 17
Total cigarette and heated tobacco unit shipment volume of 377.9 billion, down by 7.1%
Cigarette shipment volume of 367.1 billion units, down by 9.4%
Heated tobacco unit shipment volume of 10.8 billion units, up from 1.6 billion units in 2016
Reported net revenues of $35.9 billion, up by 0.1%
Net revenues, excluding excise taxes, of $13.0 billion, up by 2.0%
Excluding unfavorable currency of $315 million, net revenues, excluding excise taxes, up by 4.4% as detailed in the attached Schedule 14
Reported operating income of $5.1 billion, down by 2.1%
Operating companies income of $5.3 billion, down by 1.6%
Excluding unfavorable currency of $211 million, operating companies income up by 2.3% as detailed in the attached Schedule 14
Adjusted operating companies income, reflecting the items detailed in the attached Schedule 16, of $5.3 billion, down by 1.6%
Excluding unfavorable currency of $211 million, adjusted operating companies income up by 2.3% as detailed in the attached Schedule 16
2017 Full-Year Forecast

PMI revises, for currency only, its 2017 full-year reported diluted earnings per share to a range of $4.78 to $4.93, at prevailing exchange rates, versus $4.48 in 2016. Excluding an unfavorable currency impact, at prevailing exchange rates, of approximately $0.14 for the full-year 2017, as well as the favorable tax item of $0.04 recorded in the first quarter of 2017, the forecast range represents a projected increase of approximately 9% to 12% versus adjusted diluted earnings per share of $4.48 in 2016 as detailed in the attached Schedule 20
This forecast anticipates net revenue growth, excluding excise taxes, of over 7%, excluding currency and acquisitions
This forecast does not include any share repurchases in 2017
This forecast excludes the impact of any future acquisitions, unanticipated asset impairment and exit cost charges, future changes in currency exchange rates, and any unusual events. Factors described in the Forward-Looking and Cautionary Statements section of this release represent continuing risks to these projections

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