Cigarette maker Philip Morris International Inc. said Thursday that its fourth-quarter net income increased 11 percent as it sold more cigarettes at higher prices.
The seller of Marlboro and other cigarette brands overseas said shipments rose nearly 3 percent and it grew market share in a number of key markets.
The company's quarterly performance helped increase its global market share, excluding China and the U.S., to a record 28.8 percent for the year, the company said.
Philip Morris International, based in New York and Switzerland, reported earnings of $2.1 billion, or $1.25 per share, in the three months that ended Dec. 31, up from $1.9 billion, or $1.08 per share, a year ago. On an adjusted basis, it earned $1.24 per share, beating analyst estimates of $1.22 per share.
Excluding excise taxes, revenue increased nearly 3 percent to $7.9 billion. Analysts polled by FactSet expected revenue of $8.03 billion.
Looking forward, Philip Morris International said it expects full-year adjusted earnings to between $5.68 and $5.78 per share. Analysts expect earnings of $5.79.
Its shares rose $2.13, or about 2.4 percent, to close at $89.82 Thursday.
Smokers face tax hikes, bans, health concerns and social stigma worldwide, but the effect on cigarette demand generally is less stark outside the United States. Philip Morris International has compensated for volume declines by raising prices and cutting costs.
"Our overall brand portfolio is in excellent shape with a strong complimentary presence in profitable mid- and low-priced segments. ... and the pricing environment continues to be favorable," CEO Louis C. Camilleri said in a conference call with investors.
The world's second-biggest cigarette seller behind state-controlled China National Tobacco Corp. said it shipped 233.1 billion cigarettes during the quarter.
Shipments grew 7 percent in the company's region that encompasses Eastern Europe, the Middle East and Africa, but fell about 6 percent in the European Union as the region continues to be under pressure due to high unemployment and the continent's government debt crisis. Shipments also fell about 1 percent in Latin America and Canada.
In Asia, one of its largest growth areas, shipments grew nearly 6 percent. The company benefited from increases in Japan following the March 2011 earthquake and tsunami.
The events offered the company a sales opportunity because supply disruptions led Japan Tobacco Inc., the world's No. 3 tobacco maker, to stop shipping cigarettes within Japan.
Philip Morris International also bought Philippines company Fortune Tobacco Co. in February 2010, bolstering its Asian business.
The company said total Marlboro shipments grew more than 1 percent in the quarter to 75.4 billion cigarettes. It also saw gains in its L&M, Parliament, Bond Street and Lark brands.
Philip Morris International noted that changes in currency exchange rates hurt its profit in the quarter.
When the U.S. dollar is rising against the world's other currencies, companies that sell goods internationally take a hit when converting revenue in foreign currencies back into the dollar. That effect is particularly strong for Philip Morris International, because it does all its business overseas.
For the full year, the company said it earned $8.8 billion, or $5.17 per share, in 2012, compared with $8.59 billion, or $4.85 per share, in 2011. Revenue excluding excise taxes increased about 1 percent to $31.4 billion. Its shipments were up more than 1 percent to 927 billion cigarettes.
The company also said it exceeded its one-year gross productivity and cost savings target of $300 million in 2012 and announced a similar target for 2013.
During the quarter, the company spent $2 billion to buy back 22.4 million shares of stock under a three-year share repurchase program of $18 billion began in August.
Altria Group Inc. in Richmond, Va., the owner of Philip Morris USA, spun off Philip Morris International as a separate company in 2008. Altria is the largest U.S. cigarette seller.
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