Philip Morris International (PM -1.11%) reported its third-quarter results this morning, with the cigarette maker having mixed news for shareholders. The company reported adjusted earnings per share of $1.44, up 4.3% from the year-ago quarter. But Philip Morris also reduced its earnings guidance for the full 2013 year, with the company now expecting earnings to fall between $5.35 and $5.40 per share, down from its previous range of $5.43-$5.53 per share.
With a global focus, Philip Morris is vulnerable to currency changes, and a stronger dollar cut $0.09 per share from the company's earnings during the quarter. A $120 million hit to sales from unfavorable currency moves also kept revenue growth to just 0.1%, slightly less than analysts had expected. Weaker shipment volumes also affected Philip Morris' revenue, with a net decrease of 5.7% to 223.1 billion units.
Philip Morris' guidance cut reflected several factors, including an unfavorable tax item, an organizational restructuring charge expected next quarter, and the company's outlook about some of its markets. Philip Morris also guided full-year results excluding extraordinary items to the bottom end of its previously announced growth range, with expectations of 10% growth over 2012.
Despite the guidance cut, Philip Morris CEO Andre Calantzopoulos remained optimistic, saying that "our business fundamentals are solid and we continue to anticipate a strong final quarter." Calantzopoulos also noted other signs of strength, including the company's more-than-10% increase in its most recent dividend payment and gains in market share in almost two dozen key markets, including the U.K., Brazil, and Canada. Spending of $1.5 billion to repurchase 16.7 million shares also reflected the cigarette giant's ongoing efforts to return capital to shareholders.
