Philip Morris beats expectations

New York - Cigarette maker Philip Morris International said Thursday its second-quarter profit fell 9 percent as the stronger dollar shrunk profit earned in other currencies. Still, it beat Wall Street expectations and raised its 2009 profit estimate.

The seller of Marlboro and other brands overseas earned $1.55bn, or 79c per share, in the three months that ended in June. That is down from $1.69bn, or 80c per share, a year earlier.

Excluding one-time charges, the company earned 83c per share. That beat analyst expectations for 77c per share.

The stronger dollar dragged down per-share profit by 19c. Companies that do business overseas are hurt by the stronger dollar as profits earned in local currencies are converted into fewer dollars.

Revenue fell 9% to $15.21bn from $16.7bn. Excluding excise taxes, revenue was $6.13bn, falling short of analysts' forecast of $6.18bn.

In Europe, consumers bought fewer cigarettes, leading Philip Morris' shipment volume to fall by 3%. The declines were particularly bad in Italy, Poland and Spain.

Still, the company raised its forecast for 2009 profit to a range of $3.10 to $3.20 per share from a range of $2.85 to $3 per share.

Philip Morris International Inc is the world's largest non-governmental cigarette seller, smaller only than state-controlled China National Tobacco Corp. It has offices in Lausanne, Switzerland, and in New York. It was spun off from Richmond, Virginia-based Altria Group Inc - owner of Philip Morris USA - in 2008. The spin-off was widely seen as freeing Philip Morris International to more aggressively pursue growth in emerging markets.

Like its competitors, the company also is pursuing sales of smokeless products. Earlier in July, it said it would buy Swedish Match South Africa Ltd.

Philip Morris International and Swedish Match are already partners in a joint venture to sell Swedish snus and other smokeless tobacco products in markets outside the US and Scandinavia.

Snus are small teabag-like pouches that users stick between their cheek and gum.

- AP