Diamonds and Dogs
Philip Morris International (PM) moving away from cigarettes. Phillip Morris is up 3% to a sixth month high thanks to better than expected earnings. The Big Tobacco company is pivoting toward reduced-risk products that heat tobacco instead of burning it. Phillip Morris says these products are less harmful than cigarettes. Heated-tobacco shipments have increased in every market except Japan. Phillip Morris executives expect a decision from the FDA on whether it can sell these new devices in the U.S. by the end of the year.
Textron (TXT) got its wings clipped. The defense company is down 10% to a sixth month low after missing earnings estimates. Sales fell 8.2% year over year to $3.2 billion, largely reflecting declines at Industrial and Textron Systems. Operationally, Textron achieved margin improvements at Aviation and Bell, reflecting strong execution within those segments. Having said that, Textron lowered full year guidance even though they are receiving a lower tax rate. Not a good sign.