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Philip Morris 3Q in line
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October 19, 1999: 11:02 a.m. ET
Cigarette maker's 2% profit gain comes despite shrinking tobacco sales
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NEW YORK (CNNfn) - Philip Morris Cos. Inc., the world's largest cigarette maker, Tuesday reported third-quarter income from operations rose 2 percent, matching analysts' estimates, as the company faces shrinking tobacco sales volumes.
The New York-based company, the maker of Marlboro cigarettes and parent of Miller Brewing Co. and Kraft Foods, reported operating income of $2.09 billion, or 87 cents a diluted share, up from $2.05 billion, or 84 cents a share, a year earlier.
The results were in line with analysts' estimates, according to a poll by research firm First Call Corp.
The results exclude $144 million in one-time charges in the third quarter of 1999, tied primarily to Philip Morris' capacity reduction and a job cut plan in Brazil. In the year-earlier quarter, the company paid some $121 million in one-time charges connected mainly with tobacco-related litigation.
Including those charges, Philip Morris reported third-quarter net profit of $2 billion, or 84 cents a share, compared to $2 billion, or 81 cents a share, a year earlier. Latest quarter per-share net was higher because of a stock buyback program.
Operating revenue rose 7 percent to $19.9 billion.
But Philip Morris, which has in some respects become the poster child for a recent government campaign against 'Big Tobacco,' reported that U.S. domestic tobacco volume declined 10.6 percent and world volume fell 5.8 percent.
Executives put the best face on a tough market situation, emphasizing Philip Morris increased its world market share.
"During the third quarter, we continued to make good progress despite adverse economic and business conditions in several markets around the world," said Geoffrey Bible, chairman and chief executive officer.
"Our domestic tobacco business continued to perform well in a highly competitive environment, and our international tobacco business made solid volume and share gains in the majority of its most profitable markets," he added.
For the first nine months of 1999, Philip Morris' operating earnings rose to $6.l billion, or $2.53 per diluted share, up from $6.0 billion, or $2.45 per share, a year earlier. Net income rose to $5.82 billion, or $2.41 a share, from $5.10 billion, or $2.09 a share.
Revenue rose six percent to $59.1 billion.
Shares of Philip Morris (MO), one of the 30 stocks in the Dow Jones industrial average, rose 1/8 to 30-5/8 in early trading Tuesday.
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Philip Morris
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