Shares of Philip Morris (PM) - Get Report drifted lower Tuesday after the Marlboro maker withdrew its guidance for 2020 even as the tobacco giant beat analysts' expectations on earnings and revenue for the first quarter.
Philip Morris' stock edged down 1.67% to $75.50 in premarket trading after the global cigarette maker said it was pulling its 2020 forecast, which had called for diluted earnings per share of at least $5.50 for the full year.
The unknowns include "the duration of the pandemic, the magnitude of its economic impact during the government restrictions, and the subsequent speed of recovery," said CEO Andre Calantzopoulos in a press statement.
While the impact on the tobacco company from early stages of the coronavirus epidemic was "limited," the Philip Morris CEO said clear trouble spots have emerged.
In particular, duty-free sales have seen a "severe reduction," while the crisis has also meant "slower user acquisition" for the company's heated tobacco product, IQOS, first rolled out in the United States last year.
Rising unemployment in particular markets, leading to a decline in disposable income, "will have a temporary impact on market dynamics or the ability of certain small retailers to operate," Calantzopoulos said.
Still, Philip Morris reported strong first-quarter numbers, with social distancing and travel restrictions imposed by government's only taking hold "over the course of March," the company's CEO noted.
Philip Morris reported diluted earnings per share of $1.17 for the first three months of 2020, beating the $1.13 estimate of analysts surveyed by Zacks Investment Research. The tobacco company also reported revenue of $7.1 billion for the first quarter, topping the analyst estimate of $6.4 billion.