Philip Morris International (NYSE: PM) reported Q1 EPS of $1.21, $0.08 better than the analyst estimate of $1.13. Revenue for the quarter came in at $7.15 billion versus the consensus estimate of $6.81 billion.

GUIDANCE:

Philip Morris International sees Q2 2020 EPS of $1.00-$1.10, versus the consensus of $1.40.

• Given the inherent uncertainty surrounding the COVID-19 pandemic and the related impact on PMI's business globally, the company is currently unable to forecast its full-year financial results with reasonable accuracy. PMI is therefore withdrawing its 2020 reported diluted EPS forecast of at least $5.50, originally provided on February 6, 2020.
• The limited impact of COVID-19 on the company's first-quarter 2020 financial results primarily reflected the relatively late-quarter onset of the pandemic in many of PMI's key markets. However, as an increasing number of governments globally have now enforced self-isolation and lock-down measures -- the duration and severity of which remain uncertain -- the company anticipates an adverse impact on its full-year results that cannot be accurately quantified at this time.
• Based on data from markets to date, particularly those that were impacted by COVID-19-related government restrictions earlier in the year, PMI believes that the adverse impacts on its business from the pandemic are temporary in nature, mainly subject to the duration of government lock-downs and the subsequent timing of recovery.

2020 SECOND-QUARTER FORECAST

Although the company is unable to assess with reasonable accuracy the impact of COVID-19 on its business over the full year, it has relatively better visibility on the second quarter of 2020.

As initially communicated on February 6th, PMI anticipated a soft second quarter in 2020, notably due to an unfavorable prior year comparison, existing dynamics in Indonesia and the phasing of certain costs. The company now anticipates a further adverse impact related to the COVID-19 pandemic, with the largest quarterly impact this year expected in the second quarter.

PMI forecasts second-quarter reported diluted EPS to be in a range of $1.00 to $1.10, including an unfavorable currency impact, at prevailing exchange rates, of approximately $0.12 per share.

This forecast assumes the following estimated unfavorable EPS impacts in the quarter related to COVID-19:

• 10 cents for distributor and trade inventory movements, mainly related to reversals from the first quarter;
• 9 cents for lost Duty-Free sales, net of domestic sales recapture, assuming no recovery in global travel in the period;
• 5 to 15 cents for the impact of the delay in minimum price enforcement in Indonesia and other COVID-19-related factors, including temporary reductions in daily consumption and down-trading in certain developing markets.

For earnings history and earnings-related data on Philip Morris International (PM) click here.