Earnings Preview: Philip Morris Int'l
By MICHAEL FELBERBAUM
RICHMOND, Va. (AP) â¿¿ Cigarette maker Philip Morris International Inc., which sells Marlboro and other brands abroad, should give investors a sense of how difficult economic conditions and unemployment in many of its markets have impacted cigarette volumes. The company is releasing its fourth-quarter and full-year financial results on Thursday before the market opens.
WHAT TO WATCH FOR: Whether fewer cigarettes were sold because of tax hikes and growing tobacco control efforts. Smokers face new tax increases, bans, health concerns and social stigma worldwide, but the impact is starker in the U.S. than in many other countries.
Philip Morris International has compensated for consumers buying fewer, or cheaper, cigarettes â¿¿ and for the weak economy â¿¿ by cutting costs and raising prices.Cigarette shipments fell more than 1 percent to 236.5 billion cigarettes in the third quarter compared with a year ago when the company saw volumes jump more than 4 percent. The company said its market share increased or remained stable in many key areas during the quarter. Shipments grew 3 percent in the company's region that encompasses Eastern Europe, the Middle East and Africa, but fell about 8 percent in the European Union as the region is under pressure because of the continent's government debt crisis, which has caused smokers to switch to cheaper roll-your-own tobacco and counterfeit cigarettes. Shipments also fell nearly 5 percent in Latin America and Canada. And in Asia, one of its largest growth areas, shipments grew less than 1 percent during the quarter on a tough comparison with the year-ago period, when shipments shot up in Japan following the March 2011 earthquake and tsunami. The events offered the company a sales opportunity because supply disruptions led Japan Tobacco Inc., the world's No. 3 tobacco maker, to stop shipping cigarettes within Japan.
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