Marlboro Maker Announces Q3 Results
Philip Morris International's (PMI) 3Q revenue has fallen about 8% as cigarette sales declined in the international markets that it serves and it was damaged by foreign exchange rates for the U.S. dollar.
The owner of the well know Marlboro and other cigarette brands outside the United States reported several days ago that it gained $2.15 billion, or $1.38 per share, in the quarter, fower from $2.34 billion, or $1.44 per share, a year ago. Leaving to one side excise taxes, earnings dropped around 1% to $7.86 billion. Industry experts predicted earnings of $7.74 billion.
Cigarette shipments dropped lower than 1% to 222.3 billion cigarettes. Entire Marlboro volumes dropped 3.5% to 72.6 billion cigarettes. Shipments declined by 2% in Latin America and Canada and by 1.3% in Asia. Shipments increased by just 1% in the company's area that includes Eastern Europe, the Middle East and Africa, along with European Union. Nevertheless, the company mentioned its retail market share elevated in many major regions, such as Argentina, France, Germany, Italy, Russia, Spain and Switzerland.
Smokers deal with tax boosts, bans and social stigma globally; however, the impact of those on cigarette request commonly is plain outside the United States. PMI has paid out for volume decreases by increasing prices and lowering costs. Considering the fact that it performs all its business abroad, the company also has to get around alterations in currency values. A tougher dollar cuts into profit earned overseas when it is converted back into dollars.
PMI explained also that it's going to release Marlboro HeatStick, which is planned to be launched in Milan, Italy, later this year. The short, cigarette-like sticks are heated up to 660 degrees Fahrenheit or about 350 degrees Celsius in the hollow pen-like gadget to compose a tobacco-flavored nicotine vapor. As opposed to popular e-cigarettes that make use of liquid nicotine, the HeatStick includes genuine tobacco; a stage the company considers will make them more eye-catching to cigarette users. It is one of several reduced-risk products that Marlboro maker intends to test, as the industry diversifies above standard cigarettes despite decreasing demand.
MI based in New York and Switzerland, is the world's second-giant cigarette seller right behind state-controlled China National Tobacco Corporation.