- The Washington Times - Tuesday, April 21, 2009

RICHMOND, VA. (AP) - Philip Morris International Inc. is scheduled to report first-quarter results Thursday. The following is a summary of key developments and analyst opinion related to the period.

OVERVIEW: Cigarette maker Philip Morris International _ which sells Marlboros, L&M;, Parliament and Virginia Slims outside the U.S. _ in February reaffirmed its profit outlook for fiscal 2009, saying it expects the strong dollar to affect its earnings.

The company, which has offices in Lausanne, Switzerland, and New York, said it still expects to earn between $2.85 and $3 per share for the year, based on exchange rates as of early February. It earned $3.32 per share in 2008.

Philip Morris International said the strong dollar will reduce its profit about 80 cents per share for the year. Excluding that, the company said its profit will rise between 10 percent and 14 percent.

The company is the world’s second-biggest cigarette maker after the state-controlled China National Tobacco Corp. It was spun off in 2008 from Richmond, Va.-based Altria Group Inc., owner of Philip Morris USA.

BY THE NUMBERS: Analysts polled by Thomson Reuters expect first-quarter profit of 69 cents per share and revenue of $5.5 billion.

ANALYST TAKE: Deutsche Bank analyst Jonathan Fell said industry data and anecdotes suggest the global cigarette business remained relatively resilient in the first quarter.

But Fell said Philip Morris International already warned that 2009 would likely be a tough year for earnings because of currency exchange rates. The effects are likely to be the strongest in the first quarter.

Fell said the company has done a good job of explaining the cost implications of currency moves and a modest weakening of the dollar against key currencies over the last month or so would help Philip Morris International.

“We continue to believe that PMI’s valuation is undemanding for a company of this quality and cash-generative abilities,” Fell said.

WHAT’S AHEAD: Wall Street will keep a close eye on the impact of the exchange rates.

Investors also will be watching a 50-50 joint venture with Swedish Match announced in February that will bring smokeless tobacco products to markets around the world.

Tobacco makers have been seeking more smokeless products as demand for cigarettes has been threatened by smoking bans, higher taxes, health concerns and social stigma.

STOCK PERFORMANCE: During the quarter ended March 31, shares of Philip Morris International fell about 19.4 percent to end the period at $35.58. Over the last 52 weeks, the stock has traded between $32.04 and $56.26.

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