Philip Morris International's fourth-quarter profit dropped about 19 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.
The seller of Marlboro and other cigarette brands outside the United States said Thursday it earned $1.61 billion, or $1.03 per share, in the quarter, down from $1.99 billion, or $1.24 per share, a year ago.
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The results fell short of Wall Street expectations by 3 cents, according to analysts polled by Zacks Investment Research.
Excluding excise taxes, revenue fell more than 7 percent to $7.2 billion. Analysts expected revenue of $7.1 billion.
Its shares rose 52 cents to $82.60 in morning trading Thursday.
Cigarette shipments fell nearly 4 percent to about 214.9 billion cigarettes. Total Marlboro volumes fell more than 4 percent to 71.3 billion cigarettes. Shipments fell 7 percent in Asia, about 3 percent in Latin America and Canada, and 2.5 percent in the company's region that encompasses Eastern Europe, the Middle East and Africa, as well as in the European Union. Shipments in the European Union fell less than one percent.
Still, the company said its retail market share was stable or increased in a number of key regions, including Argentina, Canada, France, Germany, Italy, Korea, Russia, Spain, Switzerland 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.
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.
The company on Thursday said it expects full-year earnings forecast to a range of $4.27 and $4.37 per share.
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.
Philip Morris shares have climbed 1 percent since the beginning of the year, while the Standard & Poor's 500 index has stayed nearly flat. The stock has risen 7 percent in the last 12 months.
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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