Philip Morris (PM) - Get Report beat Wall Street's first-quarter earnings forecasts and raised its first-quarter guidance but tobacco stocks took a beating over a reported U.S. government plan to severely limit nicotine levels in cigarettes.
Shares of the cigarette maker, whose brands include Chesterfield, Lark, and Philip Morris, were off slightly to $91.61 in premarket trading Tuesday.
The New York company reported net income rose to $2.42 billion, or $1.55 a share, from $1.83 billion, or $1.17 a share, a year ago.
Adjusted earnings came to $1.57 a share, exceeding the FactSet consensus of $1.40.
Revenue totaled $7.59 billion, up 6% from a year ago, and ahead of FactSet's call for $7.27 billion.
The performance was driven by continued strength of IQOS, the company's smokeless products, CEO Andre Calantzopoulos said in a statement.
Philip Morris raised its full-year guidance to a range of $5.95 to $6.05 per share, while the FactSet consensus calls for $5.96.
Heated tobacco unit shipments rose 29.9% to 21.73 billion units, but Marlboro shipments slipped 9.4% to 53.68 billion units. Cigarette shipments fell 7.3% to 145.51 billion units.
Meanwhile, the Food and Drug Administration is considering only permitting cigarettes with nicotine levels so low they’d no longer be addictive, The Wall Street Journal reported.
The FDA could also move to ban menthol cigarettes as the Biden administration considers imposing requirements to lower nicotine content, the Journal said, citing people familiar with the matter.
Altria told Bloomberg in an email that any FDA action “must be based on science and evidence and must consider the real-world consequences of such actions, including the growth of an illicit market and the impact on hundreds of thousands of jobs.”