Philip Morris profit falls nearly 12%

RICHMOND, Va. — Philip Morris International’s first-quarter profit dropped nearly 12 percent as cigarette sales fell in the overseas markets that it serves and it was hurt by foreign exchange rates for the U.S. dollar.

While adjusted earnings topped Wall Street expectations, shares fell almost 3 percent in early trading.

The seller of Marlboro and other cigarette brands outside the United States earned $1.88 billion, or $1.18 per share, in the January-March quarter, down from $2.13 billion, or $1.28 per share, a year ago.

On an adjusted basis, it earned $1.19 per share, beating Wall Street estimates by 3 cents, according to FactSet.

Excluding excise taxes, revenue fell nearly 9 percent to $6.9 billion. Analysts expected revenue of $7.01 billion.

Cigarette shipments fell more than 4 percent to 196 billion cigarettes. Total Marlboro volumes fell about 4 percent to 65.9 billion cigarettes.

Shipments fell more than 7 percent in the company’s region that encompasses Eastern Europe, the Middle East and Africa, due to increased excise taxes in Russia and the prevalence of illicit trade in the region. Shipments also fell nearly 5 percent in Latin America and Canada, nearly 3 percent in the European Union and 2.5 percent in Asia.

Still, the company said its retail market share increased in a number of key regions, including Argentina, Canada, France, Germany, Poland, Russia, Spain and the United Kingdom.

Smokers face tax increases, bans, health concerns and social stigma worldwide, but the effect of those on cigarette demand generally is less stark outside the United States. Philip Morris International has compensated for volume declines by raising prices and cutting costs. The company said higher prices represented a benefit of $406 million to its sales and profit during the quarter.

Because it does all its business overseas, the company also has to navigate changes in currency values. A stronger dollar cuts into revenue generated overseas when it’s translated back into dollars.

Its shares fell $2.33 to $82.46 in morning trading.

Philip Morris International Inc., based in New York and Switzerland, is the world’s second-biggest cigarette seller behind state-controlled China National Tobacco Corp.

Richmond, Va.-based Altria Group Inc., the owner of Philip Morris USA, spun off Philip Morris International as a separate company in 2008. Altria is the largest U.S. cigarette seller.

More in Business

Newest must-try eatery: 85°C Bakery Cafe in Lynnwood

The popular bakery, part of a Taiwan-based chain, is already drawing out-the-door crowds.

Trudeau: Canada could stop dealing with Boeing over dispute

Boeing had petitioned the U.S. to investigate government subsidies of Bombardier’s CSeries aircraft.

Toys ‘R’ Us files for bankruptcy but keeps stores open

Retailers of all kinds are struggling. Toys ‘R’ Us is among at least 18 other bankruptcies this year.

Marysville-Arlington fiber-optic link planned by Comcast

The high-speed internet line, to be ready next year, is seen as a boost for business development.

‘Cheese that was grass 24 hours ago’ wins a farm accolades

Ferndale Farmstead specializes in authentic Italian cheeses — made with with American milk.

Snohomish County Business Licenses

PLEASE NOTE: Business license information is obtained monthly from the Washington Secretary… Continue reading

Coastal Community adds business relationship manager

Coastal Community Bank has hired Corbin Resseguie as a business relationship manager… Continue reading

Operation School Bell celebrates 52 years of service

On Sept. 20, Operation School Bell celebrates 52 years of service. Operated… Continue reading

Aerospace supplier MTorres consolidates into Everett site

Aerospace supplier MTorres has relocated into a 60,000 square-foot building in southwest… Continue reading

Most Read