Philip Morris International Inc., the biggest cigarette maker around the world, published first-quarter revenue that dropped more than analysts estimated as tax hikes and economic weakness affect shipments.
Net gain decreased 1.7 % to $2.13 billion, or $1.28 a share, from $2.16 billion, or $1.25, in 2012, the producer of Marlboro cigarettes said. Removing from the total some items, gain was $1.29 a share. Analysts forecasted $1.34, the average of 15 estimates released by Bloomberg.
Chief Executive Officer Louis Camilleri, who is retiring in May, has launched new versions of best-selling Marlboro to attract smokers overseas. Global shipments decreased 6.5 %, including a 10% decline in the financially fighting European Union and a 43 % drop in the Philippines, where excise taxes were raised in January.
Philip Morris reduced its prediction for per-share income this year to $5.55 to $5.65 due to unfavorable currency effects. Analysts predicted $5.72, on average. The currency effect is around 19 cents a share, a boost from a projection of 6 cents Feb. 20, PMI said.
Philip Morris dropped 2.5 % to $91.69 at the close in New York. The shares (PM) have raised 9.6 % this year while the Standard & Poor’s 500 Index has obtained 8.1 %.
The Dollar Index, a gauge of the greenback against counterparts at six main U.S. trading partners, has obtained 3.6 % this year. The stronger dollar decreases the value of sales from overseas when translated back into the U.S. currency.
Philip Morris gets all of its sales outside the United States and in 2012 gained nearly 35 % of its earnings from the European Union. The euro has decreased 1 % against the dollar this year.
Earnings went up 2.8 % to $18.5 billion. Price boosts in markets such as Russia, France, Indonesia and Argentina grew sales $531 million.
Shipments of the best-selling Marlboro cigarettes dropped 4.8 % to 68.7 billion cigarettes. Global volume dropped to 204.9 billion.
The shipments drop in the 1Q “was not unexpected” as Philip Morris had mentioned about 75 % of the price increases it intends for 2013, Chief Financial Officer Jacek Olczak explained.
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