Philip Morris Net Misses Estimates on Lower Shipments

Source from:  Bloomberg 04/26/2010

Philip Morris International Inc., the world's largest publicly traded tobacco maker, reported first-quarter profit that trailed some analysts' estimates after cigarette shipments slumped in Europe. Net income advanced 15 percent to $1.7 billion, or 90 cents a share, from $1.48 billion, or 74 cents, a year earlier, the New York-based company said today in a statement. That missed analysts' projection of 93 cents, the average of 10 estimates compiled by Bloomberg. Shipments excluding acquisitions sank 2.3 percent, hurt by the European economy and higher tobacco taxes. Volume tumbled 53 percent in the Baltics and 72 percent in Romania where tax increases have made it difficult for the average consumer to afford cigarettes, Chief Financial Officer Hermann Waldemer said. Total shipments rose 0.7 percent to 204.7 billion cigarettes, helped by gains in Asia. "There are specific problems here and there," Waldemer told analysts today on a conference call. "But if you take it all together, I see more positive signs around the world than problems." Price increases and rising snuff shipments at Reynolds American Inc., the second-largest U.S. tobacco company, helped boost its adjusted profit to $325 million, or $1.11 a share, 4 cents higher than the average analysts' estimate. Charges to settle Canadian cigarette-smuggling allegations reduced profit at Reynolds by 74 cents a share, while charges associated with the new U.S. health-care law cost 9 cents a share, the company said today in a statement. Philip Morris dropped 75 cents to $51.24 at 4 p.m. in New York Stock Exchange composite trading. Reynolds rose 36 cents to $55.77. Grizzly Snuff Shipments at Reynolds declined 2.5 percent to 18.2 billion cigarettes, while snuff volume including Grizzly and Kodiak climbed 12 percent to 85.7 million cans. Last week, Reynolds settled Canadian government allegations that it aided cigarette smuggling in the 1990s. The company sold its Canadian tobacco business to Japan Tobacco Inc. in 1999. The settlement eliminates legal expenses, uncertainties and distractions, Chairman and Chief Executive Officer Susan Ivey said today in the statement. Yesterday, Altria Group Inc., the largest U.S. tobacco company, reported first-quarter profit that exceeded some analysts' estimates after new varieties of smokeless tobacco and Marlboro cigarettes spurred demand. Excluding some items, earnings rose to 42 cents a share from 39 cents, Richmond, Virginia-based Altria said. Analysts projected 40 cents, on average. Revenue at Philip Morris, which generates all of its sales from outside the U.S., climbed 17 percent $15.6 billion as price increases added $449 million to sales. Enditem