Falling Marlboro sales and the continued strength of the US dollar have
resulted in a 14 per cent decline in third-quarter earnings at Philip Morris
International.

The group, which was spun off from Altria last year and generates all of its
sales outside the the US, said net earnings for the three months to end of
September was $1.8bn, or 93 cents a share, down from $2.1bn, or $1.01, the
year before.

European markets
The weak economy and ever increasing excise taxes in many European markets
have continued to put pressure on sales of its flagship premium Marlboro
brand, which fell 4.3 per cent to 76.9bn units during the quarter.

The is the third consecutive quarterly decline suffered by Marlboro and
underscores how cash-strapped smokers are turning their back on higher
priced cigarettes as the recession bites.

Overall cigarette volumes – which include gains from acquisitions – were down
2.9 per cent to 219.3bn units, with other brands such as Chesterfield and L&M
down 15.1 per cent and 2.8 per cent respectively.

Revenue suffered a decline
While PMI has been able to mitigate the volume decline with price increases,
revenue for the quarter still suffered a 5.3 per cent decline to $6.6bn as a
stronger dollar shrunk profit earned in other currencies.

Excluding the effects of unfavourable exchange rates, revenue grew 6.9 per
cent while earnings per share rose 18.3 per cent.

"The third quarter underscored our proven ability to deliver excellent
results and improve our operating margins," said Louis Camilleri, chief
executive.

"While we experienced lower organic volume in the quarter, this was
largely anticipated given our pricing actions and the on-going impact of the
economic crisis on total consumption levels, notably in Spain and Ukraine.
Our year-to-date volume decline of 2.1 per cent better reflects our
estimated full-year organic volume performance."

Expectations analysts
The earnings decline was less than analysts were expecting. The group, which
in February sharply lower its profit guidance for 2009 on the back of
currency headwinds, also raised its forecast for full-year earnings on signs
that the foreign-currency impact might be lessening.

The group is now expecting earnings per share to be in the range of $3.20 to
$3.25. While this compares favourably to the $3.10 to $3.20 it guided the
market towards earlier this year, it is still below the $3.32 acheived in
2008.

Shares in the PMI, the world's largest listed tobacco group, fell $1.36, or
2.7 per cent, to $49.46, giving it a market capitalisation of $95.7bn.

Dit artikel is oorspronkelijk verschenen op z24.nl