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Philip Morris reaffirms FY18 diluted EPS view $4.97-$5.02, consensus $5.03.

PMI reaffirms its 2018 full-year reported diluted earnings per share forecast, provided with its third-quarter earnings results on October 18, to be in a range of $4.97 to $5.02, at the then prevailing exchange rates, representing a projected increase of approximately 28% to 29% versus reported diluted earnings per share of $3.88 in 2017. Excluding an unfavorable currency impact, at the then prevailing exchange rates, of approximately 12c, the forecast range represents a projected increase of approximately 8% to 9% versus adjusted diluted earnings per share of $4.72 in 2017, calculated as reported diluted EPS of $3.88, plus tax items of 84c per share primarily related to the implementation of the Tax Cuts and Jobs Act. As previously communicated, PMI recorded a provisional charge of $1.6B in its 2017 income tax provision related to the Tax Act. Any adjustments to the provisional charge will be included in income tax expense, in accordance with Staff Accounting Bulletin No. 118. Under currently proposed regulations and based on its 2017 U.S. federal income tax return as filed, PMI anticipates a reported adjustment to the provisional amount to be a charge of approximately $150M, which would be recorded in Q4 and reflected in the full-year reported diluted earnings per share. This charge will have no net impact on operating cash flows for the year 2018, nor on PMI's projected 2018 full-year reported diluted EPS growth, excluding currency and any adjustment associated with this charge, of 8% to 9% versus adjusted diluted earnings per share of $4.72 in 2017. PMI continues to assume a 2018 full-year effective tax rate of approximately 24%. Further regulations related to the Tax Act are expected to be issued in 2018, and may affect the final amount to be recorded. Therefore, this charge is not included in PMI's 2018 full-year guidance.

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Publication:The Fly
Date:Nov 13, 2018
Words:309
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