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Shares of Philip Morris International Inc. (NYSE: PM) popped 3% to $85.15 Thursday morning after the global cigarette purveyor posted comfortably better than expected Q2 2015 results.
Philip Morris International second-quarter results for net income came in at $1.89 billion, or $1.21 per share on revenue of $6.86 billion. Analysts were looking for earnings per share (EPS) of $1.13 on revenue of $6.73 billion.
The tobacco titan also reaffirmed its full-year earnings guidance of $4.32 to $4.42 per share, in line with analysts' consensus estimates of $4.40 per share.
Separately, Phillip Morris announced Thursday it is expanding its research with sister company Altria Group Inc. (NYSE: MO) to develop products for the fast-growing e-cigarette market. Altria will bring the products to U.S. markets, while Philip Morris will handle markets outside the United States, where it sells traditional tobacco products.
The deal provides for exclusive technology cross-licenses, technical information sharing, and cooperation on scientific assessment, regulatory engagement, and approval related to e-vapor products. Philip Morris is aiming to capitalize on the growing appetite for alternatives to traditional smokes via the joint venture.
Indeed, an increasing number of companies are vying for a bigger share of the explosive e-cigarette industry, which some deem a safer alternative to traditional cigarettes. According to Wells Fargo, e-cig sales are expected to hit $10 billion by 2017.
Solid earnings results and upbeat forward guidance, along with an extremely appealing 4.7% yield and seven-year streak of rising dividends, make Philip Morris an attractive core portfolio holding. The mean analyst rating on shares is "Buy," according to The Wall Street Journal.
Year to date, PM shares are up 5.22%.
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