Philip Morris Net Profit Rises 15%

Revenues rose 7.3 per cent to $17.4 billion and net profits by 14.9 per cent to $1.6 billion. Earnings per share, boosted by $700 million of stock repurchases during the quarter, were ahead 17.5 per cent to $2.01, in line with analysts forecasts.

Geoffrey Bible, chairman and chief executive, said: Our three largest businesses are absolutely flying, with terrific momentum in both domestic and international tobacco, and growth in North American food that is clearly outstanding by industry standards.

Performances from the International Food & Miller Brewing divisions were less impressive.

International foods operating profits rose only 4.5 per cent to $299 million, and the beer divisions operating profits fell by 1.7 per cent to $117 million.

 

But Bible said International Food was continuing to show progress, and the company was moving vigorously to reinvigorate the beer division.

As in other recent quarters, the best performance came from international tobacco.

Philip Morris said cigarette volumes rose in nearly all big international markets except Mexico, where consumers continued to trade down to lower-priced brands.

Marlboro continued to build on its position as the worlds best-selling cigarette, helping lift total international volumes by 9.8 per cent to 177 billion cigarettes.

The divisions operating profits rose 18.9 per cent to just over $1.1 billion.

Domestic tobacco made operating profits of just under $1.1 billion on the back of a 7.8 per cent increase in volume to 60.4 billion cigarettes.

Part of the gain reflected a distortion in shipments in the comparable quarter, but it also resulted from increases in market share -particularly for Marlboro, which increased its share of US cigarette sales by 3.1 percentage points to 33.7 per cent.

The North American food division, consisting of Kraft Foods, increased operating profits by 9.4 per cent to $642 million, ignoring business sold since the beginning of last year.

Philip Morris said brisk US volume growth was fuelled by double-digit gains in beverages, pizza and desserts, along with solid increases in coffee, cereals and processed meats.

The beer division suffered from tough competition and a decline in volumes, while international food was hit by static revenues and the cost of moves to increase productivity.