Philip Morris Warns on Strong US Dollar

Source from:  Financial Times 06/25/2012

Philip Morris International, the world's largest tobacco company by revenues, said on Thursday that the strengthening US dollar will be a drag on its earnings this year. The US company that sells tobacco products overseas warned that foreign exchange fluctuations could cut 25 cents off its earnings per share in 2012, reducing the top end of its forecast from $5.30 to $5.20 a share. Excluding the impact of currencies PMI expects its profits to rise by 10-12 per cent from a year ago. PMI's profit warning came a day after Procter & Gamble reduced its earnings outlook and PepsiCo said that foreign exchange would be a bigger drag on its performance than it anticipated. In spite of currency concerns, PMI said it was making progress on other fronts. Louis Camilleri, chief executive, said in an investor presentation on Thursday that the company has been successful at fending off excessive excise taxes in most countries and had made substantial progress with "modified risk tobacco products" which are expected to support sales as more people quit smoking. "We are on the eve of what we all believe could be a paradigm shift for our industry and for PMI," Mr Camilleri said. However, PMI warned that plain packaging legislation that the Australian government is trying to impose, and that other countries are considering, represents a risk. "We are witnessing more frequent calls for measures that are not only arbitrary and alarming, but that stand little or no chance of achieving the benefits that their proponents claim," Mr Camilleri said. Enditem