Image source: Philip Morris International.

Tobacco giant Philip Morris International (NYSE:PM) has a cigarette empire that stretches across the globe. From Asia and Europe to the Americas, Philip Morris has a presence in every region of the world, with the most important omission being the U.S. market that its former parent continues to dominate.

However, just because Philip Morris is involved in tobacco everywhere doesn't mean that it has managed to pull the same amount of sales and profits from each part of the world. In particular, Philip Morris' results for 2016 so far indicate that one particular segment -- its Latin America and Canada business -- has faced substantial challenges that continue to make it the company's least important segment from a top-line and bottom-line perspective.

It's a small world after all

Philip Morris International is a behemoth, posting revenue net of excise taxes of $12.73 billion and operating company income of $5.38 billion during the first six months of 2016. Three of Philip Morris International's four main geographical segments play a roughly equal role in contributing to the company's overall success. Asia and the European Union take turns atop the revenue count, but the operating-income crown belongs squarely on the EU division's head. The Eastern Europe, Middle East, and Africa segment also plays a key role, lagging just slightly behind its two larger counterparts.

Yet the Latin America and Canada segment sits well below its three other segment peers. The Americas, excluding the U.S., brought in just over a tenth of Philip Morris' net revenues and only 8% of its total operating company income for the first half of 2016. Moreover, the trends have been particularly tough in the region. During the second quarter, operating company income was down by nearly a third. Even though currency impacts were largely to blame, currency-neutral operating company income still fell 7% -- worse than any other segment.

Part of the issue has to do with population. The Americas have about 600 million people, excluding those in the U.S., compared to more than 4 billion people in Asia. Yet the entire continent of Europe has only about 750 million people, and Philip Morris breaks Europe in two for reporting purposes.

Where Philip Morris falls short in the Americas

The other challenge for Philip Morris is penetrating all of the potential markets in the region. The company has substantial success stories in certain countries in the region. For instance, market share in Mexico has been slightly over two-thirds for more than a year now, and Philip Morris commands more than three-quarters of the market share in Argentina. Canada also has a healthy role in the tobacco giant's financial picture, with just less than two-fifths market share going to Philip Morris products.

Yet the company still hasn't managed to make a huge impression in all of its markets in the Americas. In Brazil, Marlboro's market share is just 10%. Similarly, in Colombia, Marlboro commands only 9% of the overall market. Philip Morris doesn't break out all of its quarterly performance by country, but it's hard to argue that the company couldn't make a stronger showing in countries throughout the region.

Expect further volatility

One of the biggest issues that Philip Morris has to deal with in Latin America is currency risk, which is something it shares with any multinational company doing business there. Successive devaluations of the Argentine peso have hit Philip Morris especially hard, forcing the company to take measures to maintain overall value by raising prices in local-currency terms. That inevitably has an impact on demand, even though most producers share the same concerns.

For now, it appears that economic turbulence in Latin America is likely to continue, and what the region shares with Canada is their joint reliance on natural resources for their well-being. With commodities starting to rebound, it's possible that local economies in the region will bounce back, and that could help local consumers buy more Philip Morris products. Until a recovery gains momentum, however, Philip Morris is likely to keep seeing its Latin America and Canada operations as the smallest part of its overall business.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.