Higher selling prices helped boost cigarette maker Philip Morris International Inc.'s first-quarter profit 15%, but results missed expectations due to pressure from steep excise taxes in some countries, and the weak economy.
The seller of Marlboro and other brands overseas says profit rose to $1.7 billion, or 90 cents per share, up from $1.48 billion, or 74 cents, a year earlier.
Revenue rose 17 percent to $15.59 billion from $13.29 billion. Excluding the benefit of the weaker dollar, revenue rose 8 percent, mainly due to higher cigarette prices across all business segments.
The world's second-biggest cigarette maker also reaffirmed full-year guidance of $3.75 to $3.85 per share. Analysts expect a profit of $3.84 per share
Cigarette shipment volume edged up less than 1%. Volume fell in the Baltics, Romania, Turkey and the Ukraine because of a steep excise tax. Volume was stronger in Asia, particularly in Indonesia, Korea and volume from a new business combination in the Philippines.
While tax hikes, smoking bans, health concerns and social stigma have cut cigarette demand worldwide, the decline is less stark in markets outside of the United States.
The company, which has offices in Lausanne, Switzerland, and New York, has compensated for consumers buying cheaper cigarettes worldwide -- and for the weak economy -- by raising its prices, increasing its market share and cutting costs.
Growing demand in Africa, Asia and the Middle East also has helped to offset declines in the European Union, Latin America and Canada.
In recent quarters, Philip Morris International's earnings have been hindered as the stronger dollar shrank the profit it earned in other currencies. But the weaker dollar helped results in the current quarter.
When the dollar is strong, companies that sell goods internationally and must convert revenue from foreign currencies usually take a hit unless they raise prices abroad. Conversely the weaker dollar is a benefit.
That effect is particularly strong for Philip Morris International, because all its business is overseas.
Altria Group Inc. in Richmond, Va., owner of Philip Morris USA, spun off Philip Morris International in 2008.
Copyright 2010 The Associated Press.
