NEW YORK (CNN/Money) - Unable to stand by its earnings forecasts, Philip Morris signaled Tuesday that profit growth next year may fall short of Wall Street forecasts as a flood of cheap imported cigarettes continues to hurt domestic sales.

Lured by more affordable generics and imports, smokers appear to be switching from the company's Marlboros brand, which can cost $7.50 a pack

That's hurt the No. 1 cigarette maker, which said it no longer can project 8 to 10 percent growth in underlying earnings per share for next year. Wall Street analysts had expected 8.5 percent year-to-year earnings growth, on average, according to First Call, which tracks profit forecasts.

Shares of Philip Morris, which also makes Parliament and Virginia Slims, tumbled $5.95, or 14 percent, to $37.03 Tuesday.

New-York-based Philip Morris blamed "a greater influx of both cheap imported cigarettes and counterfeit cigarettes" for the disappointment, which comes six weeks after the company cut this year's profit targets.

"We are becoming increasingly concerned about the ability of Philip Morris to take a pricing increase within its US tobacco unit in 2003," Martin Feldman, who covers Philip Morris for Merrill Lynch, told clients Tuesday. Feldman cut his 2003 profit forecast to $4.99 per share from $5.03 a share.

The company said it expects to meet its previously announced earnings-per-share growth target of 3 to 5 percent for this year, helped by its international tobacco business and food business.

Philip Morris holds an 83.9 percent stake in Kraft Foods (KFT: Research, Estimates), which makes Kraft cheese, Maxwell House coffee and Nabisco cookies, and is the biggest shareholder of brewer SABMiller

Philip Morris (MO: Research, Estimates) did not offer specific guidance for next year. Its chief financial officer, Dinyar S. Devitre, promised more details in January, when the company reports fourth-quarter results.

The company said the warning, which came from a press release, was also delivered at a Morgan Stanley Global Consumer Conference held in New York.

Losses spread to rival R.J. Reynolds, (RJR: Research, Estimates) which makes Camel, Winston and Salem cigarettes. R.J. Reynolds shares fell $4.87 to $37.83 Tuesday

Analysts surveyed by First Call expected Philip Morris to earn $4.59 a share this year, on average, followed by a profit of $4.98 in 2003.

Investors often flock to Philip Morris for its dividends. Down 19 percent this year, the company's shares have outperformed the stock market in 2002. The Standard & Poor's 500 index of large companies is off 22.5 percent this year.