Phillip Morris Conference Call Highlights

Shares of Phillip Morris PM are barely up one percent following its second-quarter earnings release. Below are some highlights and key takeaways from the company's conference call. Results: • As we expected, we achieved strong results in the second quarter, driven by a lower cigarette decline of 2.7% and the solid pricing volumes of $494 million. • As result, net revenues excluding currency increased by 4.5%, and adjusted OCI was up by 9.5% on the same basis. • Other adjusted diluted EPS excluding currency grew by 20% to $1.56 per share. • This was driven by our strong business results and a relatively easily comparison with the same quarter last year. • For the first half of the year, our adjusted diluted EPS excluding currency increased by 12.4% to $2.91. • As we announced at our Investor Day in June and are referenced today, our reported diluted EPS guidance for 2014 at prevailing exchange rates is in the range of $4.87 to $4.97 versus $5.26 in 2013. Global: • We have recently implemented or announced price increases in Germany, Portugal, and Spain. • Consequently, we're expecting the full-year decline in the EU region to be approximately 5%. • Absent trade inventory movements, our market share was also have been up in Germany. • Chesterfield performed particularly well, gaining 1.4 share points in the quarter to reach a regional share of 5.8%. • This market share has grown very rapidly since we reposition the brand in Italy, and has also benefited from geographic expansion. Guidance: • Our guidance continues to include approximately $0.61 per share of unfavorable currency at prevailing exchange rates. • After-tax charge of $0.24 per share recorded as artist impairment. • Our 2014 guidance represents a growth rate excluding currency and business restructuring charges of approximately 6% to 8% • In Japan, cigarette industry volume declined by 14.4% • Our shipment volume decreased by 16.4%. • We remain committed to generously rewarding our shareholders through a combination of dividends and share repurchases.