By MICHAEL FELBERBAUM - AP Tobacco Writer - Associated Press
Tuesday, February 9, 2010
Cigarette maker Philip Morris International Inc., which sells Marlboros and other U.S. brands abroad, reports its fourth-quarter results before the stock market opens Thursday.
WHAT TO WATCH FOR: While the weak economy, higher prices and health concerns have dampened demand for cigarettes, declines are less stark outside the U.S.
Analysts are looking for Philip Morris International's sales volumes to rise, which could indicate emerging markets are starting to recover.
With offices in Lausanne, Switzerland, and New York, the company — which sells L&M, Parliament and Virginia Slims abroad, as well as Marlboros — could see boosts from higher pricing in parts of Europe, Canada and Japan.
In recent quarters, though, Philip Morris International's earnings have been hindered as the stronger dollar shrank the profit it earned in other currencies.
When the dollar is strong, companies that sell goods internationally and must convert revenue from foreign currencies usually take a hit in the dollar value of that revenue unless they raise prices abroad. That effect is particularly strong for Philip Morris International, because all its business is overseas.
WHY IT MATTERS: Philip Morris International is the world's second-biggest cigarette company after the state-controlled China National Tobacco Corp.
Altria Group Inc. in Richmond, Va., owner of Philip Morris USA, spun off Philip Morris International in 2008. Altria is the largest U.S. cigarette seller.
WHAT'S EXPECTED: Analysts polled by Thomson Reuters expect Philip Morris International to earn 78 cents per share on revenue of $6.49 billion.
LAST YEAR'S QUARTER: Philip Morris International reported profit of 71 cents per share on revenue of $6.12 billion.