Cigarette manufacturer Philip Morris International Inc. (PMI) declared recently that its Q3 net profit increased about 31% as it sold great number of cigarettes and required higher prices for its brands.
The seller of the well-known Marlboro and other popular cigarette brands overseas also increased the lower limit of its 2010 profits forecast.
The company earned $2.38 billion, or $1.35 per share, within a year, which is higher that $1.82 billion, or 99 cents per share, in the past year. Taking into account the asset impairments and exit costs, the company gained $1.37 per share.
Except the excise duties, profit grew approximately 26% to $8.4 billion.
Philip Morris International declared that the number of smoking products it shipped increased by 4.5 % to 239.5 billion cigarettes.
The most significant were great profits of about 13% in Asia, including Indonesia, Japan and Thailand, and the advantageous impact of purchasing Fortune Tobacco Co. in the Philippines. Profits in the Asia region grew by 53 %.
The disastrous March earthquake and tsunami that took place in Japan this year also allowed
Philip Morris International a sales opportunity, because supply disruptions forced Japan Tobacco Inc., the third largest cigarette maker to stop shipping cigarettes within Japan.
PMI realized to belittle the supply disruption because all of its smokes destined for sale in Japan are manufactured outside the country. It sold brands like Marlboro and L&M to smokers in Japan who usually bought other cigarette brands.
Shipments also increased about 5% in Eastern Europe, Africa and Eastern Europe, but dropped 3.5% in the European Union and approximately 1% in Latin America and Canada.
According to estimates, total sales volume of Marlboro cigarettes grew 4% to 78.9 billion cigarettes.
Philip Morris representative stated that the company’s market share rose or remained stable in many important areas. Now it forecasts revenue of $4.75 to $4.80 per share for the 2011 year, in comparison with the previous forecast of between $4.70 and $4.80 per share.
Smoke lovers face tax increases, bans and health concerns, but the effect on tobacco demand usually is less severe outside the United States. Philip Morris International has offset for volume decreases by increasing prices and cutting costs.
The company’s profits also were backed slightly by foreign exchange rates for the U.S. dollar. Those companies that sell products internationally increase their turnover from a weaker dollar when they convert revenue in foreign currencies back into the dollar.
That action is mostly effective for Philip Morris International, because it realizes all its business overseas.
The company spokesman also stated that they spent about $1.4 billion in order to buy back 21.2 million shares of stock as part of the three-year, $12 billion buyback program that started in May 2010.
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