NEW YORK (
Philip Morris International's
consensus-beating fourth quarter earnings and 2010 guidance above Stifel Nicolaus' expectation has lead the analysts to move their earnings estimate up.
The Stifel analysts have raised their earnings estimate by 5 cents to $3.82 for 2010. They note that volatile foreign exchange markets, which are important to Philip Morris International's earnings, have led to oscillations in their earnings estimate. Stifel continues its buy rating for the company at a $56 price target.
Philip Morris International meanwhile provided a 2010 earnings guidance of $3.75 to $3.85 a share compared with consensus estimate of $3.82; Stifel believes that pricing again will be a key driver of profitability growth throughout 2010.
The company on Thursday reported fourth-quarter earnings of 81 cents a share, 3 cents above Stifel's estimate and 2 cents above the consensus. Furthermore, the outcome was a 14% increase over the prior year. Also the company saw its volumes increase 0.5% -- "well above our estimate," Christopher Growe, a Stifel analyst writes in a note to investors.
Growe writes that the company reported strong profit growth in Europe, Asia and Latin America due in part to improved foreign exchange trends, as well as strong pricing conditions. However, volumes were still soft in Europe and Latin America. Growe writes that the international tobacco outlook remains robust.
Philip Morris International announced a new share repurchase program of $12 billion over 3 years on Thursday, which is generally in line with the Stifel analysts' assumptions. They continue to believe that the company could comfortably increase its leverage to repurchase more stock over those three years.
"The industry certainly goes up against some easy volume comparisons throughout 2010 so we expect only modest volume declines in the year and sequentially improving volumes," Growe writes.
Philip Morris stock has jumped 3.8% to $48.60.
Tobacco stocks are generally up today.
British American Tobacco
stock has risen 3.5% to $67.40,
has increased 1.7% to $19.70, and
has edged higher to $51.90, up 0.7%.
-- Reported by Andrea Tse in New York
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