RICHMOND, Virginia (AP) -- Philip Morris International Inc., which makes Marlboro and other cigarettes for overseas smokers, said Thursday its profit fell 12 percent in the first quarter mainly because of the strong dollar.
The company, with offices in New York and Lausanne, Switzerland, said it earned $1.48 billion, or 74 cents per share, compared with $1.67 billion, or 79 cents per share, in the same period a year ago. The figures include profit from non-controlling assets.
Analysts polled by Thomson Reuters expected a profit of 75 cents per share
Revenue including excise taxes fell 7 percent to $13.29 billion from $14.35 billion. Analysts predicted $5.48 billion in revenue.
"Our quarterly results met our expectations and demonstrate that our performance on a constant currency basis remains robust," Chief Executive Louis Camilleri said in a news release.
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But Camilleri noted that the current economic crisis "naturally causes continued uncertainty."
Unfavorable exchange rates were the main culprit in the revenue and profit drop. Excluding the currency translation, sales rose nearly 6 percent while profit grew nearly 13 percent.
The stronger dollar has been affecting many companies that have large overseas businesses. Most U.S. companies that sell goods internationally convert those sales from foreign currencies into dollars when they report their financial results. If the dollar is stronger than those currencies, the translation results in fewer dollars in revenue.
For the quarter, overall cigarette volume of 203.4 billion was unchanged. The company recorded increases in Asia, Latin America and Canada, but posted declines of 3.7 percent in the European Union, specifically in Poland and Italy.
By brand, shipments of Marlboro, Virginia Slims and L&M cigarettes slipped worldwide, while shipments of Chesterfield and Parliament cigarettes rose.
The company said volumes for other tobacco products rose 39.4 percent, with strong growth in France and Poland.
Like most tobacco companies, Philip Morris International is pursuing sales of smokeless tobacco products to replace the revenue the company expects to lose as cigarette demand continues falling.
Philip Morris International said it still expects to earn $2.85 to $3 per share in 2009. Analysts see profit of $3.02 per share.
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The company also declared a regular quarterly dividend of 54 cents during the first quarter. Philip Morris International also said it spent $1.3 billion to repurchase 36.7 million shares of its common stock.
