Why Phillip Morris International Stock Fell Today
Key Points
Philip Morris stock fell today even though the company reported strong Q3 results.
The tobacco giant also raised its earnings outlook for the year.
Some investors were expecting even stronger momentum for the company's smoke-free products.
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Philip Morris International (NYSE: PM) stock lost ground in Tuesday's trading following the company's latest earnings report. The tobacco giant's share price fell 3.8% in the session and had been down as much as 10% at one point in the session. Meanwhile, the S&P 500 ended the day roughly flatly in line with yesterday's level.
Philip Morris published its third-quarter results before today's daily trading session began. Despite delivering sales and earnings results that beat expectations and a raise for full-year guidance targets, the stock lost ground today.
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Philip Morris stock sinks despite Q3 beats
Philip Morris' sales increased 9.5% year over year in the third quarter, and the performance helped power a substantial earnings beat. The average analyst estimate had called for non-GAAP (adjusted) earnings per share of $2.10 on sales of approximately $10.66 billion in the period. Strong sales for for the company's smokeless products helped power the period's performance beats.
What's next for Philip Morris?
Following stronger-than-anticipated performance in Q3, Philip Morris opted to raise its earnings guidance for the year. The company now expects adjusted diluted earnings per share to be between 13.5% and 15.1% -- up from its previous guidance for growth between 12% and 13.5%. Volume for smoke-free products is expected to be up between 12% and 14% year over year and help support per-share profit growth.
Despite encouraging guidance revisions, Philip Morris stock lost ground today in response to some investors expecting even stronger performance outlooks for earnings and smoke-free product volumes. But even though the stock took a step back today, performance for the company's diversification bets still looks promising overall.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool recommends Philip Morris International. The Motley Fool has a disclosure policy.
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