June 13 (Bloomberg) -- Philip Morris International Inc., the world’s largest tobacco company, said it will buy back $18 billion in stock over the next three years.
The maker of Marlboro cigarettes said the new program will begin in August, following a previous three-year, $12 billion repurchase plan that began in May 2010 and will end ahead of schedule. The New York-based company also set a quarterly dividend of 77 cents per share, it said in a statement.
The buyback is the equivalent of a 12 percent stake, based on a market value of $145 billion dollars, Bloomberg calculations show. Philip Morris reiterated a pledge to repurchase $6 billion of stock this year.
“It’s good news, better than expected, and underlines how strong PMI’s cash generating ability is,” Erik Bloomquist, an analyst at Bernenberg Bank, said in an e-mail.
Philip Morris, which was created in 2008 when Altria Group Inc. spun off its businesses outside the U.S., has boosted profit for 10 straight quarters as Chief Executive Officer Louis Camilleri has raised cigarette prices and boosted Marlboro sales in Asia and Latin America.
First-quarter profit rose 13 percent to $2.16 billion, Philip Morris said in April. The company raised 1.35 billion euros ($1.7 billion) of long-term debt with coupons of less than 3 percent last month in the largest offering in the currency from a U.S.-based company since May 2009, according to data compiled by Bloomberg.
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