Philip Morris International, the world’s largest publicly traded tobacco company, trailed profit estimates after the impact of currency fluctuations was worse than expected.
Fourth-quarter net income fell 19 per cent to $1.61 billion, or $1.03 a share, from $1.99 billion, or $1.24, a year earlier, the New York-based maker of Marlboro cigarettes said Thursday in a statement. Analysts had estimated $1.06 a share on average, according to data compiled by Bloomberg.
Philip Morris, which gets all its revenue outside the US, has relied on price increases to offset a reduction in smoking. Chief Executive Officer Andre Calantzopoulos also is expanding distribution of non-combustible products like heat sticks as an alternative to traditional cigarettes.
Net revenue fell 2.2 per cent to $19.9 billion as cigarette shipment volume declined 3.8 per cent, excluding acquisitions. Philip Morris expects the currency challenges to crimp profit by $1.15 a share this year. Earnings will be $4.27 to $4.37, the company said.
US antitrust officials are evaluating Reynolds American blockbuster agreement to buy US rival Lorillard for about $25 billion. If the transaction is cleared, it will leave 90 per cent of the 400-year-old American tobacco industry with two competitors: Reynolds and Altria Group.
Altria, the US tobacco leader, spun off Philip Morris International in 2008 so it could focus on the domestic market.
Bloomberg News, edited by ESM
