Image source: Philip Morris.

International tobacco company Philip Morris International (PM 0.28%) has been an attractive stock ever since it split off from domestic peer and former parent Altria Group (MO -0.33%), combining growth prospects from foreign markets with solid dividend income. But 2015 has been a tough year for Philip Morris, and between foreign currency weakness and new regulatory threats that, in some cases, are even worse than what Altria has had to face in the U.S., the global tobacco giant has seen its financials under pressure. Coming into Philip Morris International's fourth-quarter financial report Thursday, investors were prepared for declining fundamentals, but worse-than-expected results and gloomy guidance went beyond those initial expectations.

Let's take a closer look at Philip Morris International's latest results and what it sees ahead.

The never-ending fight of Philip Morris vs. the U.S. dollar
Philip Morris International's fourth-quarter results looked as ugly as some past quarters have. Sales dropped 11% net of excise taxes to $6.39 billion, which was slightly worse than the 10% fall most investors were expecting to see. Net income of $1.25 billion was off 22.5% from the year-ago quarter, and adjusted earnings of $0.81 per share exactly met the consensus forecast among investors.

Currency impacts continued to hit Philip Morris hard. The strong dollar cost the company $1.1 billion in revenue, which would have resulted in a 4% growth rate in currency-neutral terms. The hit to earnings was $0.18 per share, but as big as that is, it's only half the amount Philip Morris saw last quarter.

Looking more closely at Philip Morris' numbers, cigarette shipments dropped 2.4% to 209.8 billion. All four of the company's geographical segments suffered large declines in operating income, and only the Latin America and Canada segment managed to produce growth, even after taking currency impacts into account. Revenue jumped across the board in local-currency terms, but the dollar's impact pulled all four regions down, and the Eastern Europe and Middle East segment posted the worst numbers with a 19% drop in dollar-denominated sales. Favorable pricing trends helped offset currency pressures and unfavorable shifts in demand among various products.

CEO Andre Calantzopoulos pointed to Philip Morris International's successes. "Against a backdrop of improving industry volume trends in many key geographies," Calantzopoulos said, "our cigarette brand portfolio performed superbly, driven by solid market share gains underpinned by the successful rollout of the Marlboro 2.0 architecture." The CEO also pointed to reduced-risk products as a continuing source of potential for Philip Morris, with the company's collaboration with Altria likely to produce dividends down the road for both tobacco giants.

Why Philip Morris International is nervous about 2016
Calantzopoulos sees the coming year as a big opportunity. "We enter 2016 with enhanced business fundamentals and ongoing strategic initiatives that will strengthen them further," the CEO said. Despite ongoing dollar strength, Philip Morris International hopes to keep growing.

Philip Morris' guidance, however, raises some concerns about its immediate future. The tobacco company expects volume declines of 2% to 2.5%, and earnings guidance for $4.25 to $4.35 per share in earnings would be a disappointing decline compared to already-depressed 2015 levels. Philip Morris estimates that currency factors will cost it $0.60 per share in earnings, and if you adjust for those effects, the company's guidance implies a 10% to 12% growth rate in per-share adjusted net income figures.

Overall, investors in Philip Morris weren't happy with the company's uncertainty, sending the stock down by nearly 1.5% at midday following the announcement. Until the company can demonstrate its ability to grow earnings in the same way Altria has continued to do so, then Philip Morris International is at risk of further weakness in 2016 and beyond.