Philip Morris International Slips on Global Decline in Sales and Stronger Dollar

Michael Teague |

Philip Morris International Slips on Global Decline in Sales and Stronger DollarNew York-based cigarette manufacturer Philip Morris International (PM), the second-largest cigarette company in the world, reported on Thursday that a stronger dollar as well as economic turmoil in the European Union has led to a 6.5 percent lag in the company’s global shipments, and a decline in profits.

On $18.5 billion in revenue in the first quarter, the company earned $2.13 billion, or $1.28 per share, down from the prior year period during which the company earned $2.16 billion or $1.25 per share.  The earnings figures for Q1 also came in short of analyst estimates of $1.34 per share.

The company’s shipments to the European Union were down by 10 percent as a result of the sovereign debt crisis which continues to leave much of the continent in some stage of a deep recession.  Over one third of the company’s revenue comes from the EU.

Additionally, while shipments to the Middle East and Africa were up about 1.4 percent, they fell in Latin America and Canada by 7.5 percent.  With the exception of the Philippines, where shipments tanked because of an increase in excise taxes, Asia saw an increase of about 3 percent.

Furthermore, while an average of analyst estimates had projected per-share profits for 2013 of $5.72, the company scaled back its own forecast down to $5.55 to $5.65.  The company blames this on an unfavorable exchange rate from foreign currencies against a strengthening dollar.

The company’s shares were down as low as $90.70, before rebounding slightly to $91.67, a loss of 2.52 percent.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
WSBF Waterstone Financial Inc. 16.84 0.00 0.00 0

Comments

Emerging Growth

Bee Vectoring Technologies International

Bee Vectoring Technologies International Inc, formerly Unique Resources Corp is an technology/agricultural industry company. It develops and owns bee vectoring technology that is designed to utilize bees as natural delivery…

Private Markets

D-Wave

D-Wave Systems is the first quantum computing company. Its mission is to integrate new discoveries in physics, engineering, manufacturing, and computer science into breakthrough approaches to computation to help solve…

Uber

Uber connects riders with safe, reliable, convenient transportation providers at a variety of price-points in cities around the world. Uber makes money from charging their drivers 20% of the fare…