NEW YORK (TheStreet) -- Phillip Morris (PM - Get Report) shares are down 2.9% to $82.35 in trading on Thursday following a disappointing first quarter earnings report.
Net income for the tobacco company fell 12% to $1.88 billion, or $1.18 per share, from $2.13 billion, or $1.28 per share.
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Excluding excise taxes, revenue fell nearly 9% to $6.9 billion, falling short of analysts expected revenue of $7.01 billion.
Shipments to Eastern Europe, Africa and the Middle East fell more than 7% while shipments to Central America and Canada were down almost 5%.
TheStreet Ratings team rates PHILIP MORRIS INTERNATIONAL as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate PHILIP MORRIS INTERNATIONAL (PM) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and deteriorating net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The gross profit margin for PHILIP MORRIS INTERNATIONAL is rather high; currently it is at 69.17%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 25.51% is above that of the industry average.
- Net operating cash flow has increased to $2,320.00 million or 40.60% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 26.40%.
- PHILIP MORRIS INTERNATIONAL reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, PHILIP MORRIS INTERNATIONAL increased its bottom line by earning $5.26 versus $5.18 in the prior year. For the next year, the market is expecting a contraction of 2.9% in earnings ($5.11 versus $5.26).
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, PM has underperformed the S&P 500 Index, declining 12.33% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Tobacco industry. The net income has decreased by 5.2% when compared to the same quarter one year ago, dropping from $2,095.00 million to $1,987.00 million.
- You can view the full analysis from the report here: PM Ratings Report