Dips toe into alternative tobacco products worldwide
NEW YORK — Philip Morris International, the largest tobacco company in the world recently announced yet another stream of revenue growth. With more regulation threats being imposed on tobacco companies and smokers, Philip Morris is looking to explore alternatives, according to a contributed column on Seeking Alpha.
Governments globally have been attempting to regulate how and if cigarette companies can advertise. In addition, governments have hiked tax rates on cigarettes in an attempt to break people’s addictions by robbing their wallets. Philip Morris has responded by beginning to seek revenue through electronic cigarettes, chewing tobacco and snuff.
Though Philip Morris’ smokeless effort is minimal right now compared to the tobacco industry, the company does have revenue coming from their joint venture with Swedish Match AB in 2009. The smokeless products from this joint venture are currently being marketed and sold in Russia and Canada. Revenues are expected to grow significantly too, as this is only the beginning of their marketing campaign, the column states.
Philip Morris is also looking to follow in the footsteps of competitor British American Tobacco and begin marketing electronic cigarettes. Electronic cigarettes offer a somewhat healthier alternative to traditional cigarettes because when you smoke them, you inhale water vapor mixed with nicotine rather than harmful smoke. This is easier on your lungs, although the nicotine still has its normal effects. With consumers becoming more aware of the consequences of smoking, some have looked to electronic cigarettes as an alternative to help preserve their lung function.
Long-term Philip Morris believes that electronic cigarettes will expand its revenue opportunities worldwide, the writer states. Philip Morris has the highest EPS growth rate among the tobacco sector for the next fiscal year; it’s estimated to be 11.2%, ahead of Lorillard, Altria Group and Reynolds American. Its revenue growth for next year is also expected to triumph in its sector by growing by a projected 5.51%. Philip Morris yields 3.3% at its current price.
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