U.S. markets closed

  • S&P 500

    4,173.42
    +38.48 (+0.93%)
     

  • Dow 30

    34,137.31
    +316.01 (+0.93%)
     

  • Nasdaq

    13,950.22
    +163.95 (+1.19%)
     

  • Russell 2000

    2,239.63
    +51.42 (+2.35%)
     

  • Crude Oil

    61.09
    -1.58 (-2.52%)
     

  • Gold

    1,794.30
    +15.90 (+0.89%)
     

  • Silver

    26.64
    +0.80 (+3.10%)
     

  • EUR/USD

    1.2041
    0.0000 (-0.00%)
     

  • 10-Yr Bond

    1.5640
    +0.0020 (+0.13%)
     

  • GBP/USD

    1.3923
    -0.0014 (-0.10%)
     

  • USD/JPY

    108.0520
    -0.0180 (-0.02%)
     

  • BTC-USD

    54,947.49
    -1,539.37 (-2.73%)
     

  • CMC Crypto 200

    1,266.88
    +3.91 (+0.31%)
     

  • FTSE 100

    6,895.29
    +35.42 (+0.52%)
     

  • Nikkei 225

    28,508.55
    -591.83 (-2.03%)
     
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Chip supply shortage may hurt cigarette makers

Brian Sozzi
·Editor-at-Large
·2 min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Cigarette giant Philip Morris (PM) is keeping a close eye on whether the yawning semiconductor shortage will impact its fast-selling electronic heat-not-burn product called IQOS, which houses a microchip. 

"That's certainly something that we are monitoring very closely" Philip Morris CFO Emmanuel Babeau told Yahoo Finance Live, adding the situation so far is "manageable." 

Keeping IQOS on the shelves despite the chip shortage roiling everything from the auto to computer hardware industries is critical for Philip Morris. 

IQOS was a hot performer for Philip Morris in the first quarter as the company expanded it to more countries and promoted efforts to reduce traditional smoking. The company said this week that strength in IQOS helped the heated tobacco unit segment to make up 13% of its volumes and 28% of its revenues in the first quarter. A year earlier, heated tobacco products comprised 21.7% of sales. Philip Morris said the products reached 19.1 million people in the first quarter.

In this Oct. 22, 2018 photo, a visitor tries out an iQOS at a store in Tokyo. While New York-based Philip Morris is hoping to woo the world with its penlike “heat-not-burn” device iQOS (EYE-kose) as a better option than old-style smoking, nowhere else has it scored greater success than in Japan. (AP Photo/Eugene Hoshiko)
In this Oct. 22, 2018 photo, a visitor tries out an iQOS at a store in Tokyo. While New York-based Philip Morris is hoping to woo the world with its penlike “heat-not-burn” device iQOS (EYE-kose) as a better option than old-style smoking, nowhere else has it scored greater success than in Japan. (AP Photo/Eugene Hoshiko)

Overall heated tobacco unit volumes rose 29.9% in the quarter compared to a 7.3% drop in cigarette volumes.

Strength in IQOS — a high margin product for Phillip Morris — did its part to power first quarter adjusted earnings growth of 29.8% from last year. 

"There is a situation [chip shortage] that remains extremely fluid. And we have to keep monitoring what that means in the coming months to see whether there will be potentially more impact than what we see today," explained Babeau.

Philip Morris raised its full-year earnings guidance to $5.93 to $6.03 this week, estimating a 15% to 17% improvement from 2020. The new guidance assumed limited impact to IQOS from the chip shortage. Previously, the company saw 2020 earnings of $5.90 to $6.00.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

What’s hot from Sozzi:

Watch Yahoo Finance’s live programming on Verizon FIOS channel 604, Apple TV, Amazon Fire TV, Roku, Samsung TV, Pluto TV, and YouTube. Online catch Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, and LinkedIn.

Recommended Stories

  • Analyst Report: Philip Morris International Inc.

    Philip Morris International is a leading international tobacco company engaged in the manufacture and sale of cigarettes and other nicotine-containing products in markets outside the United States. Through multidisciplinary capabilities in product development, state-of-the-art facilities, and scientific substantiation, the company aims to ensure that its smoke-free products meet adult consumer preferences and rigorous regulatory requirements. Management's vision is that these products ultimately replace cigarettes.

  • 54% of vaccinated adults planning a summer vacation: Study

    Melanie Lieberman, Senior Travel Editor at The Points Guy, joins Yahoo Finance’s Kristin Myers and Alexis Christoforous to discuss travel trends for this summer.

  • It’s going to be challenging for other vendors to compete with Apple’s M1 chip: TECHnalysis Research 


    Bob O'Donnell, TECHnalysis Research President and Chief Analyst joins the Yahoo Finance Live panel to discuss Apple debuting their new iPad Pro device.

  • Why Bloom Energy Stock Trades at a Cheaper Valuation Than Its Peers

    Bloom Energy (NYSE: BE) has improved its margins significantly since its listing in 2018. Bloom Energy offers solid oxide fuel cells that use natural gas or biogas as an input fuel. By comparison, Plug Power (NASDAQ: PLUG) and Ballard Power (NASDAQ: BLDP) both offer proton exchange membrane (PEM) fuel cells that take hydrogen gas as an input fuel.

  • EU says J&J vaccine benefits outweigh risks, Pfizer finds fake COVID-19 shots 

    European regulators find a possible blood clot link with the Johnson & Johnson vaccine, but say its benefits outweigh the risks. Meanwhile, Pfizer identifies fake COVID-19 shots abroad as criminals exploit vaccine demand. Anjalee Khemlani breaks down the latest on the vaccine front.

  • Stocks Decline Amid Earnings, Economic Concern: Markets Wrap

    (Bloomberg) -- U.S. stocks fell for a second day as rising virus cases around the world led to renewed concern over the continued economic impact, overshadowing a batch of solid corporate results.The S&P 500 extended its slide from an all-time high, with investors showing caution ahead of the brunt of the earnings season. All eyes will be on whether an anticipated rise in profits will bring with it forecasts for stronger growth ahead. International Business Machines Corp. climbed after reporting its largest revenue growth in 11 quarters, while United Airlines Holdings Inc. paced a selloff in travel stocks on a bigger-than-expected loss. Netflix Inc. plunged in postmarket trading as its first-quarter subscriber growth fell short of the average analyst estimate.Other corporate highlights:Johnson & Johnson posted stronger-than-expected sales, while Travelers Cos.’s earnings beat estimates and Philip Morris International Inc. raised its outlookProcter & Gamble Co. is boosting the prices of some consumer products as the household-goods behemoth grapples with higher commodity costsWhile American equities are trading at a valuation that’s about 35% above the average of the past decade, investors are focused on what’s forecast to be the best earnings season in two years. One of their biggest concerns is whether companies are equipped to handle mounting inflation pressures as the economic recovery gains momentum.“Earnings season is ramping up, and there’s this concern about how the multinationals will give their guidance in view of the fact that we haven’t drawn a line under Covid yet,” said Fiona Cincotta, senior financial markets analyst at City Index. “That is just starting to unnerve investors. Demand for riskier assets has come off.”For David Donabedian, chief investment officer at CIBC Private Wealth Management, the stock market has been just taking a breather after a big rally, but there are still reasons to be bullish.“The economic recovery has taken hold, the earnings recovery has taken hold, everything we’ve seen from first-quarter earnings so far has been that it’s going to be a blowout quarter,” he said.Elsewhere, the dollar rose for the first time in seven sessions, while the Treasury 10-year yield dropped to the lowest level in more than five weeks.Here are some key events to watch this week:EIA crude oil inventory report on Wednesday.European Central Bank rate decision and President Christine Lagarde briefing on Thursday.U.S. releases new home sales data Friday.These are some of the main moves in markets:StocksThe S&P 500 decreased 0.7% at 4 p.m. New York timeThe Nasdaq 100 dipped 0.7%The Dow Jones Industrial Average decreased 0.8%The Russell 2000 dropped 2%The Stoxx Europe 600 sank 1.9%The MSCI World index dipped 0.9%CurrenciesThe Bloomberg Dollar Spot Index advanced 0.2%The euro was little changed at $1.2035The Japanese yen appreciated 0.1% to 108.09 per dollarBondsThe yield on 10-year Treasuries fell four basis points to 1.56%Germany’s 10-year yield fell three basis points to -0.26%Britain’s 10-year yield fell two basis points to 0.731%CommoditiesWest Texas Intermediate crude fell 1.5% to $62.44 a barrelGold climbed 0.5% to $1,779.10 an ounce.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • Why Bloom Energy and Plug Power Stocks Are Up -- but FuelCell and Ballard Are Down

    Shares of hydrogen fuel-cell stock Plug Power (NASDAQ: PLUG) are up 1.7% in 10:30 a.m. EDT trading Tuesday, while rival Bloom Energy (NYSE: BE) is enjoying a more substantial 3.1% gain after rising more than 6% earlier in the day. In a series of new stock ratings, investment bank Wells Fargo announced last night that it has started covering Bloom Energy with an overweight rating -- hence, its relative outperformance today. Plug Power skated by with an equal weight rating that, combined with a more positive outperform from Evercore ISI, is helping keep Plug's head above water, as well.

  • Pfizer identifies fake COVID-19 shots abroad

    Emergency Medicine Physician Dr. Hiral Tipirneni joined Yahoo Finance Live to break down how Pfizer indentified fake COVID-19 shots abroad and what this means for vaccine rollout.

  • Netflix subscriber growth slows after pandemic boom, shares fall 11%

    Netflix Inc said slower production of TV shows and movies during the pandemic hurt subscriber growth in the first quarter, sending shares of the world's largest streaming service down 11% on Tuesday. Roughly 3.98 million people signed up for Netflix from January through March, below the 6.25 million average projection of analysts surveyed by Refinitiv. Netflix estimated it will add just 1 million new streaming customers in the second quarter.

  • Netflix adds 3.98 million new subscribers in Q1, sharply missing expectations

    Netflix reported first-quarter earnings after market close on Tuesday, with Wall Street bracing for a slowdown in subscriber growth following a record-setting year.

  • Retail investors are still buying stocks

    The stars of the show in financial markets during the first quarter of 2021 were retail traders.

  • Dow Jones Jumps 250 Points, Led By Caterpillar, Visa; ASML's Blowout Quarter Lifts Chip-Equipment Stocks

    The Dow Jones was in rally mode along with the other major stock indexes Wednesday. Caterpillar and Visa outperformed and are closing in on buy points.

  • AT&T’s transition to 5G means huge upfront costs. And it needs HBO Max to succeed.

    AT&T Inc. was staring down a series of daunting business transitions when the pandemic dealt it a blow that has left the company bruised as it faces the second year of COVID-19.

  • Encrypted chat app Signal reveals flaws in Cellebrite equipment

    Encrypted chat app Signal suggested in a blog post published on Wednesday that products sold to law enforcement from Israeli surveillance provider Cellebrite can easily be sabotaged. Cellebrite DI Ltd, which specializes in helping law enforcement and intelligence agencies copy call logs, texts, photos and other data off of smartphones, has repeatedly come under fire for past sales to authoritarian governments, including Russia and China. Signal, a privacy-focused app eager to show the lengths it goes to protect users' conversations, clashed with Cellebrite last year when the Israeli company said its equipment was upgraded to allow law enforcement to scoop up Signal messages from devices in their possession.

  • Dow Jones Futures Signal Further Losses For 'Hard Penny' Market Rally; Netflix Near Buy With Earnings Due

    The "hard penny" market rally retreated Monday, led by Tesla, Nvidia and Square. IBM flirted with a breakout late on Q1 results. Netflix is near a buy point with earnings due.

  • Should You Trade Netflix Stock After Earnings?

    Co-hosts Joel Elconin and Dennis Dick discussed trading Netflix Inc (NASDAQ: NFLX) Wednesday on Benzinga's YouTube show "PreMarket Prep." What Happened: Netflix reported first-quarter earnings after the close Tuesday. The stock fell more than 10% as the company issued lower-than-expected second-quarter sales guidance. Related Link: Netflix: Q1 Earnings Insights If Netflix gets above its Wednesday premarket high at $505.10, "you can look for more upside," Elconin said. Netflix has a long way to go to fill the gap back to $546.30, he said. In regard to the stock's potential to fill the gap Wednesday, "just forget about it," Elconin said. $500 is a big psychological level, the "PreMarket Prep" co-host said. View more earnings on NFLX Elconin said he wants to see if Netflix can hold that level over the next few days. If it does, he said it's possible the stock could work its way higher, but added he has "no interest in buying" Netflix right now. Co-host Dennis Dick compared Netflix to Tesla Inc (NASDAQ: TSLA). In the same way that Tesla was the only electric vehicle play for awhile, Netflix was the only play for streaming, he said. Netflix now has major competition, Dick said. NFLX Price Action: Netflix was down 7.25% at $509.70 at last check Wednesday. Image by tomasi from Pixabay. See more from BenzingaClick here for options trades from BenzingaKeep An Eye On Netflix's Churn: Mark TepperWhy This CNBC Contributor Is Buying Netflix Ahead Of Earnings© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  • 3 Cheap Cathie Wood Stocks to Buy Right Now

    If you are looking for a top growth stock to add to your portfolio, scoping out Cathie Wood's ARK Innovation ETF (NYSEMKT: ARKK) can be a great place to start. Three cheap stocks to consider from that fund are Regeneron Pharmaceuticals (NASDAQ: REGN), Baidu (NASDAQ: BIDU), and Paccar (NASDAQ: PCAR). With relatively low valuations and tons of potential, these are among the best Cathie Wood stocks to buy today.

  • Tesla's biggest rival in China is all in on flying cars

    Xpeng is getting into the flying car game. The company's vice chairman and president Brian Gu tells Yahoo Finance Live why.

  • Philip Morris Stock Is Rising on Earnings, as Altria Falls

    Philip Morris’s CFO says that the Food and Drug Administration’s target of reducing combustible cigarette consumption dovetails with the company’s own—to move people to reduced-risk products.

  • 5 High-Yield Dividend Stocks to Protect Your Retirement From Inflation

    There are few things more disruptive to an economy than rising inflation and unemployment. Unemployment continues to plague GDP growth in Greece and Spain. Despite being right around a 10-year low, unemployment is above 15% in both countries.