With so much effort going into convincing people to stop smoking, from higher taxes to ads to incentives, it's hard to believe a tobacco company would revise earnings higher. But essentially that's what Philip Morris International (PM) did Wednesday, if currency impact is excluded from its revised full year 2010 forecast. Apparently, exchange rates were more volatile and affected the company's profit more than it had previously anticipated.
Philip Morris revised down its forecast for 2010 full-year earnings per share to a range of $3.70 to $3.80 from the $3.75 to $3.85 per share range it had projected in April 2010. Taking out the currency impact, the maker of Marlboro -- the world's top-selling cigarette -- actually projects earnings per share to increase by approximately 14% to 17%, compared to $3.24 in 2009, up from the previous 10% to 13% range projected in April.
Philip Morris said the higher projection compared to the April 2010 guidance, "reflects an improved business outlook, in particular with regards to Japan, and the positive impact of the reversal of certain tax provisions, offset by adverse currency of $0.20 per share."
According to Thomson Reuters, analysts' earnings estimates average $3.76 a share in 2010, right in the middle of the new range.
A two-day investor meeting begins Wednesday in Operations Center in Lausanne, Switzerland. Senior management will offer its perspective on the company's business outlook and long-term growth strategies, including strategies for growth in the company's E.U., EEMA, Asia and Latin America and Canada regions.
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