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Philip Morris International 3Q profit falls
Categories:
· Business
International:
· USA
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Source:http://www.kentucky.com/,2009-10-19
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Cigarette maker Philip Morris International Inc., which sells Marlboros and other U.S. brands abroad, said Thursday its third-quarter profit fell nearly 14 percent as the stronger dollar shrunk profit earned in other currencies.
The company said it sold fewer cigarettes because its prices rose and the global economy remained weak.
When the dollar is strong, companies that sell goods internationally and must convert revenue from foreign currencies usually take a hit in the dollar value of that revenue unless they raise prices abroad.
That effect is particularly strong for Philip Morris International, because all its business is overseas, but the overseas cigarette market isn't shrinking as quickly as the U.S. market.
The company - which has offices in Lausanne, Switzerland, and New York and sells L&M, Parliament and Virginia Slims as well as Marlboros - said it earned $1.79 billion, or 93 cents per share, in the three months that ended in September.
That is down from $2.08 billion, or $1.01 per share, a year earlier, when its earnings included a $169 million tax benefit.
Revenue, including taxes, fell 4.6 percent to $16.57 billion. Excluding excises taxes, revenue fell 5.3 percent to $6.58 billion.
Analysts expected profit of 91 cents per share on revenue of $6.71 billion.
Its shares fell $1.51, or about 3 percent, to $49.32 in morning trading Thursday.
Philip Morris shipped 219.3 billion cigarettes in the quarter, 2.9 percent less than a year earlier, as declines in Europe and the Middle East were offset by a rising volume in Latin America and Canada from its acquisition of Rothmans Inc. during the third quarter last year.
The company estimates it will earn $3.20 to $3.25 per share in 2009, up from its earlier forecast of $3.10 to $3.20 per share.
Philip Morris International is the world's second-biggest cigarette maker after the state-controlled China National Tobacco Corp. It was spun off in 2008 from Richmond, Va.-based Altria Group Inc., owner of Philip Morris USA. Altria is the largest U.S. cigarette seller.
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