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Smokes Up: Altria, Reynolds, Philip Morris

The big three in cigarettes -- Reynolds, Altria and Philip Morris International -- all up their full-year outlook in announcing their quarterly earnings.



) -- If there is a winner in the cigarette industry,

Reynolds American


is it.

The maker of Camel and Pall Mall cigarettes saw its profit surge 72% in its third quarter to $362 million, or $1.24 per share, compared with $211 million, or 72 cents, in the year-ago period. Analysts expected a profit of $1.17 a share.

Reynolds also lifted its full-year outlook in the range of $4.60 to $4.70 a share, up from prior forecast of $4.40 to $4.60 a share.

Not all was positive for Reynolds. Most of the company's quarterly gains were due to charges from trademark impairment and restructuring that dampened last year's results. In addition, revenue sank 5% to $2.15 billion from $2.27 billion last year, while the company said shipment volume slid 11%, compared to an industry decline of 12.6%.

The industry is, of course, closely watching cigarette volume figures from the third quarter, as the quarter marked the start of a 62-cent tax increase.

Meanwhile, although Reynolds was the clear standout in the sector, both

Philip Morris International

(PM) - Get Philip Morris International Inc. Report



(MO) - Get Altria Group Inc Report

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also upped their outlook in delivering their earnings in the past 24 hours.

Philip Morris International, for starters, announced that selling cigarettes overseas has been both a positive and negative. While the stronger dollar weighed down its third-quarter profit, the international demand for cigarettes isn't as weak as it is in the U.S.

Thus, despite both a decline in profit and sales, Philip Morris International raised its full-year outlook.

During the quarter, the company earned $1.79 billion, or 93 cents a share, down 14% from $2.08 million, or $1.01, in the year-ago period. Analysts expected profit of 91 cents a share.

Revenue slipped 4.6% to $16.57 billion, while shipment volume declined nearly 3% to 219.3 billion cigarettes.

Looking ahead, Philip Morris International expects full-year earnings in the range of $3.20 to $3.25 a share, up from a prior forecast of $3.10 to $3.20 a share.

Despite its lackluster results,

Altria also lifted the low-end of its full-year guidance


On Wednesday, the company reported a 1.7% uptick in its third-quarter profit, beating Wall Street's consensus. And while revenue climbed 20% to $6.3 billion, excluding the excise tax, it actually slumped 11%.

The company said it sold 12% fewer cigarettes during the quarter across all of its brands, including Marlboro, Parliament, Virginia Slims and Basic.

-- Reported by Jeanine Poggi in New York

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