ETFs In Focus After Phillip Morris's Downbeat Q2 Results

Shares of Philip Morris International Inc. (PM - Free Report) declined 1.45% at market close on Thursday, July 20, 2017. The company reported a year-over-year growth of 1.5% in total quarterly revenues, as it increased to $19.319 billion from $19.041 billion. Excluding excise taxes, it reported a $6.917 billion revenue figure in the second quarter of 2017 compared with $6.064 billion in the first quarter of 2017 and $6.641 billion a year ago.

The company’s shares failed to beat the Zacks Consensus Estimate on both earnings and sales in the second quarter of 2017. Increased regulation and poor demand weighed on the company’s performance.

Q2 Results in Focus

Philip Morris reported non-GAAP earnings per share of $1.14, missing the Zacks Consensus Estimate of $1.23. Moreover, Philip Morris’ second-quarter revenue of $6.917 billion fell short of the Zacks Consensus estimate of $7.088 billion. The tobacco company reported operating income of $2.7 billion, down 1.2% year over year.

Shipment Volume

The company’s total shipment volume came in at 199.89 billion units, declining 5% from second-quarter 2016 figure of 210.45 billion units. The decline was due to a sharp fall in shipment volume of cigarettes, which decreased 7.5% to 193.54 billion compared with 209.29 billion units in the prior-year quarter. Some respite was provided due to an increase in shipment volume of heated tobacco units. Shipment volume of heated tobacco units increased to 6.35 billion units from 1.15 billion units in the year-ago quarter.

Outlook

Philip Morris expects its full year 2017 diluted earnings per share to be in the range of $4.78—$4.93 compared with $4.48 in 2016. This forecast band represents 9—12% growth over the 2016 figure, excluding impact of adverse currency movement of $0.14 for the full year and a tax item in the first quarter of $0.04.

In the current scenario, we believe it is prudent to discuss the following ETFs that have a relatively high exposure to Philip Morris.

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