Swedish Match Q3 Profit Just Misses Forecast

Source from:  Reuters 10/28/2009

Tobacco products maker Swedish Match posted a slightly lower-than-expected rise in third-quarter operating profit on Tuesday, and said a weaker dollar and promotions would weigh on fourth-quarter earnings. The firm's operating profit came in at 874 million Swedish crowns, compared with 808 million in the previous year and just missing a mean forecast for a 884 million profit in a Reuters poll. Swedish Match repeated its view that group sales and operating profits in the second half, excluding larger one-off items, would exceed levels a year ago. However, it warned that profits in the last quarter of the year could be hit by a number of factors. "For the fourth quarter, Swedish Match expects that the combination of timing of shipments and promotions in the U.S. and a weaker U.S. dollar will bring Group operating profit below the level of the third quarter," the company said in a statement. The operating margin for key product wet snuff, a tobacco product sold mainly in the United States and Scandinavia but banned elsewhere in the European Union, rose to 48.8 percent compared with 47.6 percent seen in the poll. The company benefited from a sharp surge in cigar sales in the first quarter ahead of a new federal tax in the U.S. market, introduced on April 1, but CEO Lars Dahlgren has warned that its cigar margin could fall back to lower levels in the coming quarters. Enditem