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Tobacco firms revise 1Q
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May 15, 1998: 2:08 p.m. ET
Philip Morris, RJR Nabisco take one-time charges to cover settlement
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NEW YORK (CNNfn) - Two major U.S. tobacco companies said Friday they will revise their previously reported first-quarter results to reflect exceptional charges resulting from the tobacco industry's $6.6 billion settlement with the state of Minnesota last week.
Philip Morris Cos. Inc. and RJR Nabisco Holdings Corp. (RJR) said separately that they each will take additional charges on their quarterly balance sheets due to the settlement.
Philip Morris recorded $806 million in additional charges for the quarter, lowering its net profit by $492 million, or 20 cents per share, to $1.4 billion, or 57 cents per share.
The New York City-based company, which makes Marlboro cigarettes, Miller beer and Kraft foods, had previously reported a first- quarter net profit of $1.87 billion, or 77 cents per share, on April 21, up from $1.77 billion, or 72 cents per share, in the year-earlier period.
The company's underlying net earnings, diluted EPS and basic EPS remain unchanged in the quarter, as these exclude exceptional charges.
Underlying operating income also was unchanged at $3.8 billion, up 7.7 percent from a year ago.
RJR Nabisco recorded a $312 million charge, bringing the group's net results in the quarter to a loss of $20 million, or 10 cents per diluted share.
The group -- which produces R. J. Reynolds cigarette brands as well as Nabisco snack foods -- had reported earnings of $179 million, or 52 cents per diluted share, on April 23.
RJR operating revenue was unchanged at $3.94 billion.
Philip Morris stock (MO) was down 11/16 at 35-9/16 in Friday afternoon trading. RJR Nabisco stock (RN) was down 5/16 at 27-3/16.
It is unknown whether other leaders in the tobacco industry -- including Liggett Group Inc., Brown & Williamson Tobacco Corp. and Lorillard Tobacco Co. -- will follow the companies' lead and adjust their results in a similar fashion.
Thirty-seven states still have suits pending against big tobacco, while the U.S. Senate raised cigarette prices by $1.50 a pack Thursday in an attempt to discourage young people from smoking. 
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