In recent quarters, Philip Morris International
For its fourth quarter, Philip Morris delivered a 9.7% revenue gain, aided by an improved currency exchange. (Revenue growth would have been 7.9% without currency fluctuations.) Pricing increases more than countered any volume declines for key brands. Operating income grew by a similar 9.7%, and earnings per share increased by 12.7%.
Overall quarterly cigarette volume actually rose by 0.5%, with growth in Africa, Eastern Europe, and the Middle East, and declines in the European Union. However, flagship brand Marlboro did deliver a 3.4% volume drop as consumers in Spain and Russia turned away from premium smokes.
Key competitor British American Tobacco
In comparison, Altria
Obviously, the tobacco industry is volatile, subject to external factors including increasing excise taxes and a rocky economy. In spite of this, Philip Morris managed to buy up $5.5 billion worth of stock last year, and $1.3 billion in stock for the fourth quarter alone. The company also plans to kick off a new three-year, $12 billion buyback program in May, and it forecasts an increase of as much as 15% in earnings per share in 2010.
Philip Morris International is certainly being optimistic about its future, given its growth projections and stock buyback program. Now that currency fluctuations and volume declines have stabilized, it looks like the company's real-world results are starting to mirror Philip Morris's image of itself.
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