Why Philip Morris Stock Was Pulling Back Today

Core Viewpoint - Philip Morris International reported disappointing fourth-quarter earnings, missing bottom-line estimates and providing lower-than-expected guidance for 2024, leading to a decline in stock price [1][2]. Financial Performance - Shipments of heated tobacco units (HTUs) increased by only 6.1%, significantly lower than the 11.6% growth of British American Tobacco and the 18% growth Philip Morris achieved in the previous quarter [2] - Overall shipments of cigarettes and HTUs decreased by 0.5%, while organic revenue rose by 8.3% to $9.05 billion, surpassing estimates of $9.01 billion [2] - Adjusted operating income increased by 8% to $2.9 billion, with adjusted earnings per share (EPS) rising by 12% to $1.36, falling short of the consensus estimate of $1.45 [3] Market Position and Product Performance - Smoke-free products accounted for 39.3% of total revenue, with Iqos gaining 1.3 percentage points of market share, reaching 9.7% [3] - Revenue from smokable tobacco rose by 5.3%, driven by a 9.9% price increase, despite a 1.9% decline in shipments [3] - Iqos has surpassed Marlboro in net revenues, establishing itself as the leading premium nicotine brand within less than 10 years of its launch [3] Future Outlook - For 2024, Philip Morris anticipates adjusted EPS to be between $6.30 and $6.44, reflecting a growth of 7% to 9%, but below the analyst consensus of $6.60 [4] - The company forecasts a 14% to 16% growth in HTUs, indicating a recovery from the slow growth experienced in the fourth quarter [4] - With a strong dividend yield of 5.7%, the recent stock pullback may present a buying opportunity for income investors [4]