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Philip Morris meets Street
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October 17, 2000: 12:10 p.m. ET
Tobacco firm matches Wall Street estimate; posts slight revenue increase
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NEW YORK (CNNfn) - Philip Morris Cos. Inc. reported third-quarter profits Tuesday that matched the Wall Street estimate.
The New York-based maker of Marlboro cigarettes, Kraft cheese, Miller beer and other products reported earnings, excluding one-time items, of $4.2 billion, or 99 cents a share, up from $4 billion, or 88 cents a share, in the year-earlier quarter. Analysts polled by earnings tracker First Call had expected earnings of 99 cents a share.
Including income from operations that the company sold in 1999, Philip Morris reported net earnings of $2.3 billion, or $1.03 a share, compared with net earnings of $2 billion, or 84 cents, in the year-ago quarter.
Revenue increased about 1 percent to $20 billion from $19.8 billion. Philip Morris (MO: Research, Estimates) stock jumped $1.31 to $32.06, Tuesday.
 The company's operating results exclude a $139 million pretax gain on the sale of a French candy business as well as $144 million in pretax charges from job cuts and restructuring at the company's international tobacco business in Brazil and the United States.
"Our solid business fundamentals, powerful global brands, strong worldwide infrastructure and relentless focus on identifying new product and business innovations are a powerful combination that delivered strong third-quarter financial results for Philip Morris despite the impact of unfavorable currency," Chairman Geoffrey Bible said.
Bible also said Philip Morris' outlook "remains robust," and that he projects full-year 2000 earnings per share of $3.71, a 12.4 percent increase from a year ago.
Income from the company's U.S. tobacco operations increased 6.1 percent to $1.5 billion in the quarter mainly because of higher prices, the company said. Profits from overseas tobacco operations grew 4.7 percent to $1.4 billion due to higher pricing and increased sales, and despite the impact of weak currencies, which reduced profit by $87 million.
Analysts were not surprised by the positive earnings report despite the turmoil caused by class action suits against tobacco companies from former smokers. In July, a Florida jury handed smokers $145 billion in punitive damages from tobacco companies for not making advertisements clearly stating the health dangers of nicotine.
"This isn't anything new. This consistency has been here for the last year. People just don't pay attention when there's a lot of noise about other stuff," Tim Swanson, an analyst with A.G. Edwards & Sons Inc. said.
Davenport & Co. Analyst Ann Gurkin agreed, although she remains cautious about the company's long-term earnings because of the continuing risks over huge litigation costs and settlements.
The company also expects to close on its $14.9 billion acquisition of rival Nabisco Holdings Corp. (NA: Research, Estimates), the maker of Oreo cookies, by the end of the year. The deal was announced in June. 
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