Philip Morris International Inc. (PM) reported fourth-quarter results with earnings of 80 cents per share. Earnings were above the Zacks Consensus Estimate of 78 cents and were up 12.7% year-over-year.
Net revenues increased 9.7% to $6.7 billion, attributable to favorable currency translations and pricing across all regions. This was partially offset by unfavorable volume mix primarily in the EU region.
On an organic basis (excluding currency and acquisitions), revenues increased 7.9%, driven by favorable pricing. Cigarette volume was up 0.5% year-over-year to 218 billion units, due to gains in EEMA, primarily in Algeria, Egypt and Turkey. In Asia, growth was fueled by double-digit growth in both Indonesia and Korea. The volume gain was partially offset by declines in the EU and in Latin America & Canada.
Organic cigarette shipment volume increased 0.4%. Marlboro volumes declined 3.4% due to market declines in the EU, EEMA, Asia, more than offsetting growth in Indonesia, Korea and the Philippines, and Latin America & Canada. Nevertheless, Philip Morris gained market share in over two dozen countries, including Japan, Russia, Brazil and the Netherlands.
The gross margin contracted 123 basis points (bps) to 24.5%, while the operating margin contracted 39 bps to 1.7%.
Concurrent with the earnings release, management provided guidance for fiscal 2010. The company forecasts full-year earnings to be in a range of $3.75 to $3.85, at prevailing exchange rates. Excluding currency, earnings are expected to increase by approximately 12%-15%.
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