Last year, one was to forget the Philip Morris share, which fell 33% – and that includes reinvested dividends. The company has dealt with regulatory pressure on its traditional tobacco products and the growth of weapons. E-cigarettes take part of traditional products, and bring unwanted attention to the sector from the Food and Drug Administration. Big tobacco has positioned itself for the future, but not everyone is convinced they can continue to dominate, even though Philip Morris CEO André Calantzopoulos who spoke to Barron after the company's earnings is not one of them.
Fortunately, 2019 is a new year.
The (PM) share has already gained 14% this year, having increased 1.6% to $ 76.63 after the release of the third-quarter earnings. And which
(MO), which reported before Philip Morris, the revenue was quite good. Philip Morris earned $ 1.25 per share on revenues of $ 7.5 billion, while analysts were looking for earnings per share of $ 1.16 on revenue of $ 7.46 billion. The volume of cigarette and heated tobacco fell 4.6% in the quarter. And the company's guidance was not so good either. For the entire year, Philip Morris EPS sees $ 5.37 on total 1.5% to 2% cigarette volume declines, while the industrial volume declined 2.5% to 3%.
Here's what Philip Morris CEO Calantzopoulos had to say about …
- The Future of Weapons. Calantzopoulos claims that while the market wants to hit the tobacco industry and weapon like a zero-sum game – as if Juul Labs or Philip Morris & # 39; iQos will "win" vaping – it's simply the wrong way to look at it. "There's no reason to be too scary … I'm trying to steer people away from binary thinking because there's room for all kinds of products to coexist in the United States and around the world at the end of the day … I don't see it binary paths, I see parallel paths, with crosses. "
- Consumer Choice. Different products should offer different benefits to different smokers, says Calantzopoulos. He believes that Philip Morris iQos, as he points out, has been successful in overseas markets with new, cheaper models and devices that can go further between costs – having the best chance of converting smokers away from traditional cigarettes. "On our side, we can develop a portfolio of products, put the money into commercial effort, but we need the government to play the game as well; For consumers to change their behavior, you need products, but you also need incentives and differentiation." "Taxation, labeling, are all important." Only after these measures are in place will we see a real bend point in people moving away from traditional cigarettes to weapon, at which time the supply tactics like nicotine caps can make more sense. (Many investors have been concerned about the persistent delays in iQos approval in the US.)
- Stay Relevant. Ultimately, Calantzopoulos says he's not worried about new rivals or Philip Morris's ability to remain relevant. After all, the Marlboro brand remains the best known in the world, despite never having a very high percentage of the market, so he believes the company will continue to deliver and win consumers through industry changes. "We are the company that started to disturb our own industry, and we expect the competition to take place from existing and new companies. It is healthy: The more products available, the more [thepeople'ssmokingandthecategoryofwomenwillhavethecategories"
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