Oct. 18 (Bloomberg) -- Philip Morris International Inc., the world’s largest publicly traded tobacco company, reported third-quarter profit that trailed analysts’ estimates after sales tumbled in the European Union.
Net income fell 6.3 percent to $2.23 billion, or $1.32 a share, from $2.38 billion, or $1.35, a year earlier, the New York-based maker of Marlboro cigarettes said today in a statement. Excluding some items, profit totaled $1.38 a share. Analysts projected $1.39, the average of 15 estimates compiled by Bloomberg.
European Union nations facing a debt crisis and high unemployment saw smokers cut back or switch to contraband cigarettes or roll-your-own varieties. Sales in the region slipped 15 percent in the third quarter.
Total cigarette shipments slipped 1.3 percent, hurt by a decline of 8.1 percent in the European Union. Volume rose 3 percent in Eastern Europe, the Middle East and Africa and 0.6 percent in Asia.
Shipments fell on “another very weak performance in Europe not completely offset by robust growth throughout the rest of the world including emerging markets,” Christopher Growe, an analyst with Stifel Financial Corp. He recommends buying Philip Morris shares.
The company missed analysts’ profit estimates for the first time in eight quarters, according to data compiled by Bloomberg.
Philip Morris revised its full-year profit forecast, projecting $5.12 to $5.18 a share. In July, it had predicted earnings of $5.10 to $5.20 a share. Analysts anticipate $5.20, the average of estimates compiled by Bloomberg.
Philip Morris fell 4.2 percent to $88 at the close in New York. The shares have gained 12 percent this year.
(The company has scheduled a conference call with analysts at 9 a.m. New York time. Click PM US <Equity EVTS <GO> to listen.)
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