NEW YORK, N.Y. – Philip Morris International Inc.’s second-quarter profit rose as market share improved and some costs declined.
The seller of Marlboro and other cigarette brands outside the United States earned $1.89 billion, or $1.21 per share, for the period ended June 30. A year earlier the New York company earned $1.85 billion, or $1.17 per share.
Last year’s quarter included $489 million in asset impairment and exit costs. Philip Morris had no such costs in the current quarter.
The results beat Wall Street expectations. The average estimate of nine analysts surveyed by Zacks Investment Research was for earnings of $1.12 per share.
Market share increased in several key markets, including Brazil, France, Germany, Hong Kong, Russia and Spain.
Revenue, excluding excise taxes, declined to $6.86 billion from $7.8 billion as Philip Morris continued to deal with unfavourable currency translation.
But the performance surpassed analysts’ estimates. Five analysts surveyed by Zacks predicted revenue of $6.72 billion.
Because Philip Morris does all of its business overseas, the company has to navigate changes in currency values. A stronger dollar cuts into revenue generated overseas when it’s translated back into dollars.
Cigarette shipment volume fell 1.4 per cent, excluding acquisitions. The company said that this was due to declines in the European Union, mostly Italy.
Marlboro cigarette shipment volume dropped 1.1 per cent, with declines in the European Union and U.K. partly offset by France and Spain. Lark posted the biggest gain, up 20.2 per cent, primarily due to Japan.
Philip Morris maintained its forecast for full-year earnings in a range of $4.32 to $4.42 per share. Analysts polled by FactSet expect $4.40 per share.
The company now anticipates that it will be at the upper end of its outlook for full-year adjusted earnings to climb 9 per cent to 11 per cent. The outlook is adjusted for currency-exchange fluctuations.
Philip Morris and Swedish Match also announced Thursday that they’ve mutually decided to end their joint venture deal related to the sale of smokeless tobacco products outside the U.S. and Scandinavia. While Swedish Match and Philip Morris said that there’s a small but growing demand for the products in current joint venture markets, they said that the development has taken longer than they initially expected.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on PM at http://www.zacks.com/ap/PM
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