NEW YORK (TheStreet) -- You do not normally associate the clean Alpine airs and views of Switzerland with the tobacco industry but this week Philip Morris International (PM - Get Report) held its two-day investor meeting in Lausanne, where the company has a large Operations Center.
Since early Thursday when the company confirmed that a mix of the impact of currency movements, a weak economy in Europe and the impact of illicit trading in Asia raised the possibility of earnings "...at the lower end of our 2014 guidance for full-year currency-neutral adjusted diluted EPS growth of 6%-8%," the shares have fallen around 5%. They currently trade around $84, down 3.5% for the year to date.
So bad tidings from Switzerland for one of the most popular shares for income seekers in the S&P 500?
Actually not at all.
Certainly trading conditions remain competitive, with cigarette volumes declining in many regions and illicit trade still a challenge, but the commitment to grow the current 4.2% dividend yield and continue share buybacks shone through from the meeting. Also, the company is changing with the times. announced the purchase of a company called Nicocigs Limited that will undoubtedly be part of their global push in this area. Read: eCig Advertising Marketing Snares the Cool eKid Generation in Net There is a big prize on offer. Globally cigarettes had a retail value of over $400 billion in 2013 while e-vapor products only came in at $2 billion. Give it a few years, however, and the e-vapor market is likely to be a lot bigger. Philip Morris International showed some evidence from Italy where only 3.1% of adult smokers in that country were e-vapor product users while 55% of smokers were aware of e-vapor products but had never tried them.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts