Phillip Morris International on Fire

Well Q1 as an independent company is in the books for Phillip Morris International (PM) and of to a great start we are.

On Wednesday, Philip Morris reported double-digit sales and profits increases in the second quarter, boosted by higher prices and the weaker dollar.

Philip Morris shipped 223.2 billion cigarettes in Q2, up 1.0% from a year earlier. For the year, Philip Morris forecast earnings of $3.32 to $3.38 a share, up from its previous forecast of $3.18 to $3.24. This represents a growth of about 19% to 21% from a 2007 pro-forma adjusted base of $2.79 per share. Analysts had expected the company to earn $3.25 per share.

The company has just started to return cash to shareholders in the form uf a multi-billion dollar share repurchase which will further support EPS. How much you ask? During Q2, Philip Morris repurchased 41.4 million common shares for $2.1 billion, which is a part of its two year $13 billion share repurchase program that began in May of this year.

PM also declared its inaugural regular quarterly dividend of 46 cents during the quarter, which represents an annualized rate of $1.84 per share and a dividend yield of 3.6%.

In the quarter, Philip Morris International said profits rose 20.0%, to $1.8 billion, or 86 cents per share, from $1.5 billion, or 70 cents per share, in the year-earlier quarter. Revenues jumped 20.1%, to $16.7 billion, up from $13.9 billion last year. The sales include excise taxes totaling $10.0 billion. Excluding those taxes, revenue rose 15.5%.

Sales in the Eastern Europe, Middle East and Africa segment jumped 19% with operating income climbing 28%. Europe, its largest market, saw a 15% increase in sales and a 20% profit increase. Latin America and Asia recorded earnings jumps of 44% and 22%, respectively.

Just buy this stock and look back at it in ten years….you’ll be very happy

Disclosure (“none” means no position):Long PM