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Marlboro Maker’s Sales Drop in Numerous Markets

Published on April 14th, 2014 00:00

Philip Morris International (PMI) reported on Wednesday its 4Q revenue fell 5 % as cigarette sales dropped in the majority of its markets in spite of passing bigger prices. The maker of best selling Marlboro, Parliament, Virginia Slims and many other cigarettes also was affected by overseas exchange rates for the U.S. dollar; however its altered final results were in accordance with Wall Street anticipations.

Smokers deal with tax boosts and bans across the world, however the influence of those on cigarette demand usually is less bare outside the United States. PMI has off set for volume drops by increasing prices and reducing costs. The maker gained $1.99 billion, or about $1.24 per share, in the period concluded December 31, falling from $2.1 billion, or $1.25 per share, in the previous year.

On an altered schedule, it gained $1.37 per share, surpassing Wall Street rates by a penny. Eliminating excise taxes, profits dropped around 1 % to $7.8 billion, corresponding to expert's prediction. It shares went up $1.67, or around 2 %, to $78.57 in morning stock trading. Cigarette shipments dropped approximately 4 % to 223.2 billion cigarettes. Entire Marlboro volumes decreased almost 1 % to 74.8 billion cigarettes.

Economic obstacles in the European Union and raised excise taxes forced shipments straight down around 5 % throughout the quarter. Shipments decreased 1.2 % in the company's region that includes Eastern Europe, the Middle East and Africa. Shipments increased 4 % in Latin America and Canada. In Asia, one of its biggest growth regions, the company stated that cigarette volume declined over 9 % with profits in Indonesia compensated by decreases in Japan, Korea and the Philippines. Shipments in the Philippines dropped 26 % in the course of the quarter, damaged by a substantial tax boost a year ago and a rise in non-taxed cigarettes.

Since it does all its activity abroad, the maker also has to get around modifications in currency values. For the entire year, the company stated its revenue dropped 2.5 % to $8.58 billion on profits of $31.2 billion, eliminating excise taxes.

PMI based in New York and Switzerland, is the world's second largest cigarette maker after China National Tobacco Corporation. Richmond, Va.-based Altria Group, the proprietor of Philip Morris USA, spun off Philip Morris International as an individual company in 2008.