85.00 0.00 (0.00%)
After hours: 4:57PM EST
|Bid||85.00 x 900|
|Ask||86.99 x 1200|
|Day's range||84.13 - 87.15|
|52-week range||69.27 - 92.74|
|Beta (5Y monthly)||1.05|
|PE ratio (TTM)||18.44|
|Forward dividend & yield||4.68 (5.47%)|
|Ex-dividend date||17 Dec 2019|
|1y target est||N/A|
(Bloomberg Opinion) -- A quarter century ago, a man named Steve Parrish was the ugly voice of the tobacco industry. The tobacco wars were raging: States were suing the cigarette companies, whistle-blowers were leaking damning documents to the media and David Kessler, the commissioner of the Food and Drug Administration, was trying to regulate tobacco products.Parrish was a senior executive at Altria at the time, and his job was to strike back. He would go on television and hurl insults at Kessler. He would insist that cigarettes weren’t addictive. He would denounce the mounting lawsuits in strident language.Eventually, though, Parrish realized that Big Tobacco had no choice but to negotiate with its opponents. And once he sat down with the other side, a funny thing happened. His anger dissipated when he realized that Big Tobacco’s critics were reasonable people with legitimate concerns — and that Altria, stuck in its bunker for so long, had been wrong to dismiss them. “All we knew was our own rhetoric,” he told me years later. Ultimately, those negotiations led the tobacco companies to agree to pay the states $246 billion and accept tighter restrictions on cigarette marketing.I bring this up because of something that took place last week. On Wednesday morning, Vital Strategies, a leading global public health organization, sponsored a talk titled “Hope Meets Reality: E-Cigarettes, a Public Health Harm or Harm Reduction?” The event was a one-sided assault on e-cigarettes.One speaker was Matthew Myers, the president of the Campaign for Tobacco-Free Kids. Myers has been a critic of e-cigarettes from the start — but he’s been in overdrive ever since Juul became the e-cigarette of choice for teenagers. Its manufacturer, Juul Labs Inc., faces a host of legal woes, including a joint investigation by 39 attorneys general announced on Tuesday. (Both Vital Strategies and the Campaign for Tobacco-Free Kids are supported financially by Bloomberg Philanthropies.)After his talk, Myers was joined on stage by another e-cigarette critic, Joanna Cohen, the director of the Institute for Global Tobacco Control at the Johns Hopkins Bloomberg School of Public Health. The two of them took turns bashing e-cigarettes. Myers complained about “the few zealous people” who continued to argue that e-cigarettes could save lives; Cohen claimed that “there was some evidence of nicotine’s effect on the cardiovascular system.” And so on.Among those who had registered to attend the talk was Moira Gilchrist, the vice president for scientific and public communications at Philip Morris International. That’s right: She’s part of Big Tobacco. Gilchrist is in charge of the company’s harm-reduction efforts. The scientists she leads devise nicotine products that won’t kill consumers the way cigarettes do.Virtually everyone in the public health community is skeptical that Philip Morris is serious about transitioning the company to products that don’t rely on deadly combustible tobacco. But Gilchrist is a true believer. She joined the company a dozen years ago after working at a leading cancer charity in the U.K., she told me the other day. “This is not something we are doing for show,” she said. “This is our commercial future.”A few days before the Vital Strategies talk, Gilchrist received a note from the group disinviting her. “In accordance with our non-engagement policy, tobacco industry representatives will not be granted access,” it read. In an accompanying statement, Vital Strategies elaborated: Let us be clear: There is a fundamental and irreconcilable conflict of interest between public health and the tobacco industry. And as an organization whose mission is to ensure everyone is protected by a strong public health system, we at Vital Strategies align ourselves with the World Health Organization, governments around the world, and the global health community in upholding a firm non-engagement policy with the tobacco industry.As it turns out, the talk was streamed, and Gilchrist was able to watch it. When we spoke the next day, she told me that there were things that Myers and Cohen had said that she would have liked to challenge if she had been allowed in the room.For instance, the case that nicotine harms the cardiovascular system has been made most prominently by Stanley Glantz, an anti-tobacco zealot who is a professor at the University of California, San Francisco. One widely quoted Glantz study published last year purported to show that e-cigarettes doubled the risk of heart attacks. But last week, the Journal of the American Heart Association retracted that study because its data was “unreliable.”As for Myers, one of the key points he made in his talk was that there was no evidence that smokeless nicotine devices were causing large numbers of adults to quit smoking but there was lots of evidence that they were hooking teenagers. Of course, part of the reason adult smokers aren’t racing to take up e-cigarettes is that the public health community has heaped such abuse on them that many adults don’t realize they are safer than cigarettes.Philip Morris doesn’t make an e-cigarette like Juul. Its product, called IQOS, delivers nicotine by heating tobacco rather than burning it. And as Gilchrist pointed out when we spoke, there is plenty of evidence that it is moving smokers away from cigarettes. In Japan, IQOS has nearly 18% of the market — not the smokeless market, but the tobacco market, including cigarettes. (“We have seen the most remarkable drop in cigarette sales,” she said.) In Russia it has 5% of the market. In Portugal 7.2%.Last spring, the FDA approved the device for sale in the U.S., ruling that it is “appropriate for the protection of public health” because it contains fewer toxins than cigarettes. Philip Morris has now submitted data to the agency as it seeks a designation that would allow it to market IQOS as less harmful than cigarettes — something e-cigarettes are not allowed to do. That would be a tremendously big deal.Gilchrist told me that there were many things public health advocates believe that Philip Morris also believes: that e-cigarettes should be kept away from youths, for instance, and that the products should be heavily regulated, based on sound science. But, she added, “what I see is that the public health organizations are using youth use as a reason to deprive 40 million U.S. smokers from having access to these products.” She added:This is the future of this company. We have the product, the science, and the will to make it work. For us, there is one path forward and it is smoke-free products. The question is whether public health wants to make it more difficult for us or less difficult.I understand why the public health community doesn’t want to legitimize the tobacco companies by meeting with them; they did a lot of shameful things in the past, and they still sell a product that kills about half its users. The memory of those old sins makes public health officials skeptical that tobacco executives like Gilchrist are sincere when they say they want a cigarette-free future.But the only way we’re going to solve the e-cigarette conundrum — namely, how do we keep the products away from youths while urging adult smokers to make the switch? — is if the two sides sit down and start talking. I think the public health officials would see — just as Parrish saw two decades ago — that those on the other side genuinely want to find a solution. At that point, the two sides could fairly easily come up with proposals that would work for everyone. The refusal to engage with the tobacco companies is actually harming public health.As I’ve noted before, one of the people who negotiated with Parrish all those years ago was Myers. It took a lot of guts; when his allies in the public health community discovered that he was involved in the tobacco settlement talks, he was roundly denounced. But he stuck with it and helped change the cigarette landscape for the better. If only he were willing to do it again, he could hasten the end of cigarettes.(Adds announcement of an investigation into Juul Labs Inc. in the fifth paragraph. )To contact the author of this story: Joe Nocera at email@example.comTo contact the editor responsible for this story: Daniel Niemi at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Joe Nocera is a Bloomberg Opinion columnist covering business. He has written business columns for Esquire, GQ and the New York Times, and is the former editorial director of Fortune. His latest project is the Bloomberg-Wondery podcast "The Shrink Next Door."For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Decaffeinated coffee and reduced-sugar soft drinks have had their day. Now, according to a small biotechnology company, it’s time for low-nicotine cigarettes.Altria Group Inc. and RJ Reynolds Tobacco told regulators two years ago that such a product might not be possible. Friday, their claims may be upended as 22nd Century Group Inc., a Williamsville, New York-based company, goes before the Food and Drug Administration seeking to market cigarettes with 95% less nicotine than conventional ones.22nd Century has for years made Spectrum cigarettes, a brand with varying levels of nicotine that have been used for government-funded research on tobacco and addiction. It won authorization from the FDA in December to start selling a brand to the public, which will be named VLN. The next step is to get permission to market the cigarettes as a low-nicotine alternative.“The product greatly reduces your nicotine consumption, and it smells, burns and tastes like a conventional cigarette,” John Pritchard, the company’s vice president of regulatory science said in a phone interview before the FDA meeting.His company aims to disrupt the nearly $100 billion U.S. tobacco industry by marketing its cigarettes as a tool to wean adult smokers off addictive nicotine. Pritchard said he plans to present data showing that former smokers or those who never smoked have low interest in the product.Head StartA nod from the FDA would give 22nd Century a useful marketing tool that Marlboro maker Altria lacks. Altria is selling Philip Morris International’s IQOS device, which heats but doesn’t burn tobacco, in the U.S. But the agency still hasn’t granted an application to market it as a reduced risk compared to cigarettes.22nd Century said its application should be easier to evaluate than Altria’s given the body of research on its Spectrum cigarettes, which were used as part of $100 million of federal grants to study low-nicotine cigarettes.The company also says its central claim -- that its cigarettes have 95% less nicotine content -- is easier to verify than the reduced-risk designation that Altria is seeking for IQOS. It hopes to start selling the cigarettes by the second quarter.After the FDA declared in 2018 that it intended to establish rules on maximum nicotine levels in cigarettes, Altria said it wasn’t clear whether substantially reducing cigarettes’ nicotine “is technically achievable” or whether it would lead to reduced smoking.Reynolds, meanwhile, said the industry is “at least 20 years away from producing tobacco at a commercial scale that would meet the range of low-level nicotine discussed.”22nd Century counters that by citing the FDA’s own assessment of a plan to lower nicotine to the levels found in VLN products. The agency says the restrictions would lead to 5 million additional adult smokers quitting within a year of the plan going into effect while averting more than 8 million tobacco-related deaths by the end of this century.The company holds patents on methods of producing cigarettes by targeting different genes and enzymes in tobacco plants, and makes them from genetically engineered tobacco. It is also working on non-GMO tobacco lines.Michael R. Bloomberg has campaigned and given money in support of a ban on flavored e-cigarettes and tobacco. He is the majority owner of Bloomberg LP, the parent company of Bloomberg News, and has entered the Democratic presidential race.To contact the reporter on this story: Tiffany Kary in New York at email@example.comTo contact the editors responsible for this story: Sally Bakewell at firstname.lastname@example.org, Jonathan RoederFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Investors in Philip Morris International Inc. (NYSE:PM) had a good week, as its shares rose 6.2% to close at US$88.75...
(Bloomberg) -- Philip Morris International Inc., the international seller of Marlboros, forecast that profit this year will be lifted by sales of tobacco sticks for IQOS devices.Earnings per share should rise at least 19% to $5.50 this year, based on current exchange rates, the company forecast. That’s short of the $5.61 analysts have been expecting.Key InsightsThe company launched its latest IQOS 3 Duo in Japan in September. IQOS’s 41% growth in the fourth quarter suggests it’s holding its own against heightened competition in the market for smoking alternatives.Philip Morris has said that as people smoke fewer combustible cigarettes, it plans not only to switch them to next-generation devices like IQOS, but also maintain a strong share of the cigarette market. Its total international cigarette market share was 26.9%, down 0.3% points.The performance contrasts with that of smaller rivals such as Imperial Brands Plc, the maker of Kool cigarettes, which has warned of declining sales from its smoking alternatives. Philip Morris sold 60 billion heat sticks last year and said it’s on track to reach its goal to ship as many as 100 billion in 2021.Market ReactionPhilip Morris has gained 11% in the past year.For the company statement, click here.To contact the reporter on this story: Tiffany Kary in New York at email@example.comTo contact the editors responsible for this story: Sally Bakewell at firstname.lastname@example.org, Thomas MulierFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Investing.com - Philip Morris (NYSE:PM) reported on Thursday fourth quarter earnings that beat analysts' forecasts and revenue that topped expectations.
(Bloomberg Opinion) -- Altria Group Inc.’s investment in Juul Labs Inc. is getting vaporized.The tobacco giant on Thursday announced a $4.1 billion non-cash charge related to its stake in the maker of electronic cigarettes. It’s the second writedown in three months, and means Altria’s 35% stake is now valued at $4.2 billion, about a third of its original $12.8 billion investment. Altria shares more than 5% in midday trading.The Marlboro maker’s Juul transaction, in December 2018, was part of a familiar playbook across Big Tobacco. With demand for cigarettes declining, it had little choice but to join other market leaders in the industry in pivoting toward alternatives with potentially lower health risks, but higher growth prospects.For most players, there have been hurdles along the way. Two years ago, for example, demand for devices that heat rather than burn tobacco slowed in Japan — the biggest market for this kind of alternative — which was a problem for Philip Morris Intenational Inc. and the U.K.’s British American Tobacco Plc. Unfortunately, with Juul, Altria has encountered more challenges than most.A crisis has engulfed the vaping industry after a spate of illnesses and deaths related to electronic cigarette use. Even though there is a growing consensus that these occurrences involved vaping oils carrying the psychoactive ingredient in cannabis, the events have taken their toll on the U.S. vaping market.Juul has been at the forefront of criticism, besieged by lawsuits accusing it of using sweet fruit and candy flavors to overtly target underage users. The Food and Drug Administration recently announced a ban on flavors aside from menthol and tobacco for pod-based electronic cigarettes, such as those made by Juul, pending new rules coming into force in a few months time. Kenneth Shea, analyst at Bloomberg Intelligence, says Juul’s many challenges must include the possibility that the FDA doesn’t approve it to remain on the U.S market. All manufacturers must submit their applications to keep their products on sale by May.Along with the Juul writedown, Altria has moved to renegotiate the terms of its agreement with Juul. It has the option to be released from a non-compete clause if Juul can’t sell electronic cigarettes in the U.S. for at least a year – acknowledging the possibility that Juul won’t get FDA approval -- or if the value of its investment falls below $1.28 billion. This paves the way for Altria to introduce its own vaping cigarettes, or, more likely, according to Bloomberg Intelligence’s Shea, a move away from electronic cigarettes to heat-not-burn. Unlike electronic cigarettes, these haven’t been drawn into the vaping crisis. Altria has the license to distribute IQOS, Philip Morris’s heat-not-burn product, in the U.S. Given the long-term trend for declining smoking rates – Altria will no longer provide multi- year forecasts for U.S. cigarette declines -- all tobacco companies, must find alternatives to traditional cigarettes. At the time of its original investment, Juul was disrupting the industry, leaving Marlboro man trailing in its wake. By getting in on the act, it was hoping to future-proof its business.But Altria should have been more aware of the risks, particularly those related to underage vaping, which were plain to see, after Juul axed social media accounts and pulled some flavors. And it should have factored this into the price it paid. To be fair, it couldn’t have foreseen how the environment for electronic cigarettes in the U.S. would deteriorate so dramatically over the past six months.Altria’s new emphasis on heat-not-burn over vaping looks sensible, but it makes the Juul investment look a very expensive foray into a category it may end up moving away from. As Altria’s investment dollars go up in smoke, so do any hopes that its shift away from cigarettes will be quick or easy. To contact the author of this story: Andrea Felsted at email@example.comTo contact the editor responsible for this story: Beth Williams at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Philip Morris (PM) possesses the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
Philip Morris (PM) unveils an alliance with KT&G. The deal will allow it to commercialize KT&G's smoke-free products outside South Korea.
Philip Morris (PM) has an impressive earnings surprise history and currently possesses the right combination of the two key ingredients for a likely beat in its next quarterly report.
Philip Morris' (PM) performance is bearing adverse impacts of declining cigarette sales volume. However, expansion in RRPs and strong pricing are significant upsides.
Philip Morris International Inc. (NYSE:PM) saw a double-digit share price rise of over 10% in the past couple of...
(Bloomberg) -- Juul Labs Inc. had a tough 2019. In 2020, a new breed of vaping startups aim to learn from their biggest rival’s plight—and take on big tobacco.Would-be pretenders to Juul’s throne have watched as the company’s easy-to-conceal devices became immensely popular with teens, leading regulators to fear Juul could addict a new generation to nicotine. Several companies believe they have come up with technological and regulatory approaches that will avoid Juul’s troubles and potentially disrupt both the tobacco and cannabis industries. Here’s a look at some of the challengers:Related: More Evidence Links Vaping Lung Injuries to Vitamin E Acetate The Heating InnovatorRespira is part of a crop of promising startups coming out of the medical-device industry. The West Hollywood, California-based company has an ultrasonic method that vaporizes tobacco or cannabis, thus avoiding the heating process that can create new carcinogens. Because the U.S. Food and Drug Administration requires tobacco companies to report “harmful and potentially harmful constituents,” that should be an advantage from a regulatory standpoint, according to Brian Quigley, co-founder of consulting firm Green Sky Strategy, and an investor and adviser for Respira.“For science and safety, the whole industry had a wake-up call on VapeGate,” says Quigley, referring to last year’s epidemic of lung illnesses. While the illnesses added fuel to the vaping fire, they were later blamed on additives like vitamin E used in illicit cannabis vaping. U.S. public health officials haven’t definitively connected the outbreak to any one device or e-liquid product.Mario Danek, who founded Respira in 2018, says he thinks the vape industry is going to be reshaped by devices that work with both cannabis and nicotine—as well as substances from the pharmaceutical world. Respira is working on potential agreements to license its technology in all three categories in 2020.“Whereas the e-nicotine community started with what would be cool and palatable, and tried to work its way into reduced risk for health and safety, we started with efficacy and safety and then went into pleasure and what the consumer might want,” he says.The NaturalistCannabis Technology House is an Israeli startup founded by former Altria employees. The company plans to start selling its devices in 2020. It says its devices won’t have the health concerns that come with vape liquids.The devices have also been designed to work with natural tobacco—something that would compete with IQOS, a heat-not-burn device for tobacco only that’s been sold by Philip Morris International Inc. around the world for years and just launched in the U.S. with marketing by Altria Group Inc., which also owns a 35% stake in Juul.“People told us we’re crazy to go after natural flowers; the future is with vape. And then the vaping crisis happened,” says Greg Kunin, the company’s co-founder. Its devices heat but don’t burn the original form of cannabis. “Because its natural, no one can add anything to it,” he says. “The consumer doesn’t have to worry if there is Vitamin E or some other substance.”Altria and Juul both declined to comment for this story.Like big tobacco, Kunin says the company’s regulatory strategy will be international. It won’t start in Israel, where recreational cannabis isn’t legal. It has a two-pronged approach: If it decides to market its device first for tobacco, it is already in talks with two big tobacco players and will work with one of them, probably starting in Asia—the Philippines or Japan. Meanwhile, with cannabis, its regulatory strategy might have it start in Canada, come to the U.S. later and work with the FDA to “develop socially responsible products.”Such approaches are popular among startups, Green Sky Strategy’s Quigley says. “Portugal is viewed to be on the pro-cannabis side, and there’s a lot happening in Mexico where medical marijuana is legal.”Thinking through regulation, Kunin says, is just as important as coming up with a solid product. “If you don’t get the right balance you can have the Juul effect—it was crazy successful then the regulation came and it all stopped.”Though Juul has curtailed its marketing and withdrew its flavored products before a federal ban last week, it has remained a punching bag for vaping foes and a financial albatross for Altria, which was forced to write down its stake in the company last year.The Cryptologist Airgraft, based in Montreal, started working on a solution to black market products and liquids even before Juul’s troubles surfaced because its staff had a background in the medical device world and could see such problems were inevitable, says founder and chief executive Mladen Barbaric.He says he knew that crystallization of liquids was an issue in vape technology that people would try to combat with vitamin E oil and MCT oil. Airgraft, which launched in September, has what it calls a “securepod” which is encrypted to let the company trace where it was filled.It works with oil-filling partners who must upload certificates of analysis from a government-certified lab, and the device gets disabled after the 0.5 grams of oil in it has been consumed. The technology also lets them notify users and do a recall if a problem is found with the oil after it’s dispensed.‘Big Year’Many companies in what’s estimated to be a $24 billion vape industry want to make technological changes to current devices to avoid the kind of problems Juul has been through, but can’t because they would require a new, expensive regulatory review, says Tony Abboud, executive director of the lobbying group Vapor Technology Association. In the U.S., any product not already on the market as of 2016 needs to go through a rigorous FDA authorization process.The innovations come as traditional cigarettes are expected to continue faltering while cannabis sees more breakthroughs.“2020 will be another big year for transformation,” Cowen analyst Vivien Azer said in a December research note on the cannabis business. She predicts that Illinois, where legal pot sales began Jan. 1., and Michigan, where sales began Dec. 1, could both expand the nascent market by billions of dollars. Meanwhile, the tobacco industry, which Azer also covers, has seen about two years of declining sales volumes.Some startups are even learning from Juul’s woes to innovate in the old school cigarette category. In December, the FDA authorized the sale of two new low-nicotine cigarettes from New York-based 22nd Century Group Inc. Its shares rose 28% that day.Michael R. Bloomberg has campaigned and given money in support of a ban on flavored e-cigarettes and tobacco. He is the majority owner of Bloomberg LP, the parent company of Bloomberg News, and has entered the Democratic presidential race. To contact the author of this story: Tiffany Kary in New York at email@example.comTo contact the editor responsible for this story: Sally Bakewell at firstname.lastname@example.org, Lisa WolfsonTimothy AnnettFor more articles like this, please visit us at bloomberg.com©2020 Bloomberg L.P.
Alongside fashionable brand names like Mercedes-Benz and Chopard on the red carpet backdrop at Germany's Bambi Awards last year: IQOS. That's Philips Morris' alternative cigarette that heats up but doesn't burn ground-up tobacco. A study by tobacco researchers at Stanford University says such promotions are part of the company's "normalization" strategy. That strategy, it says, aims to scrub the company's image as a maker of cigarettes that cause cancer ... and market its smoking alternatives as youthful, upscale lifestyle products. The Stanford professor who led the study says Philip Morris is trying to resurrect the glory era of smoking by associating IQOS with a glamorous and stylish lifestyle. Last year, a Reuters investigation found that Philip Morris had used young online personalities to promote IQOS. That prompted the company to admit that it had violated its own policy that prohibits it from using youth-oriented celebrities or models who are or appear to be under 25. But the Stanford study says IQOS marketing continues to substantially stray from those corporate standards by using youth-oriented social media channels, trendy pop music festivals and celebrity influencers. In Israel, the brand was present at a Tel Aviv University student music festival last year where the minimum age for admission was 16. Philip Morris partners with Altria to sell IQOS in about 50 countries including the U.S. They've pledged to regulators that they would market it only to adult smokers. But in other countries, the Stanford study says the company uses what it calls "coaches" and "ambassadors" to market IQOS. In Romania and Russia, THAT MEANS RECRUITING ATTRACTIVE WOMEN AS YOUNG AS 19 TO MARKET THE DEVICE, ACCORDING TO JOB LISTINGS REVIEWED BY REUTERS. Philip Morris did not respond to questions about its business relationships with the establishments that promote the device and display its branding.