Is Philip Morris Still a Smoking Hot Stock?

E = Earnings are Only Sometimes Increase Quarter over Quarter

Remember, until March 2008, Philip Morris was an operating company of Altria Group. Revenue increased in three out of the last four years, falling very slightly in 2009 — about a 2.6 percent revenue loss — but averaging nearly 12 percent growth for every other year.

Earnings tell a similar story, decreasing nearly 2 percent in 2009 but averaging over 20 percent growth for every other year.

Quarter over quarter shows a slightly more shaky financial record. Revenue has only increased in one out of the last four quarters, having fallen 2.4 percent in the most recent quarter.

Earnings have fallen in two of the of the last four quarters, dropping 2.8 percent in the most recent quarter. An average of 14 analysts predicts $1.23 EPS for the December quarter.

T = Trends Support the Industry in which the Company Operates

There are some obvious trends to consider when thinking about the tobacco industry. In the United States, the legislative effort against cigarettes is tremendous, but Philip Morris operates internationally. This is a pro and con, because the U.S. isn’t the only country with brutal anti-smoking campaigns.

Australia recently implemented “plain packaging” laws that drastically alter and regulate cigarette packaging, forcing cigarette companies to display graphic warnings on their packages. Similar motions have been raised — and denied — in the United States, while countries such as New Zealand and the United Kingdom have expressed interest in the legislation. China, the world’s largest cigarette market, openly aims to completely ban cigarette advertising and raise tobacco taxes…