[Intl-tobacco] Philip Morris Net Income Surges

[Robert Weissman]

"In the international tobacco division, however, underlying operating
profit rose 8 percent to $1.6 billion, driven by higher pricing, lower
costs and favorable currency translations."


Philip Morris Net Income Surges
By Associated Press
October 17, 2002, 9:45 AM EDT

NEW YORK -- Philip Morris Cos. said Thursday it saw its net income soar
in the third quarter, inflated by a big gain from the sale of its Miller
Brewing operation.

The New York-based food and tobacco giant reported net income of $4.36
billion, or $2.06 a share, compared with $2.33 billion, or $1.06 a
share, in the same period last year.

Core earnings rose 4.1 percent to $2.7 billion, or $1.26 a share,
matching a consensus estimate of analysts surveyed by Thomson First
Call.

The core figure excludes the cumulative effect of the change in
accounting for derivatives and hedging activities, and assumes the
initial public offering for Kraft Foods took place Jan. 1, 2001, instead
of June last year.

Reported net income includes an after-tax gain of about $1.7 billion
from the July sale of Miller to South African Breweries PLC of Britain,
forming SABMiller PLC, in which Philip Morris holds a 36 percent stake.
The gain is excluded from core results.

Revenue declined 1.2 percent to nearly $20 billion from $20.25 billion a
year earlier. The company said revenue was up 4.9 percent on an
underlying basis.

For 2003, Philip Morris still expects an 8 percent to 10 percent
increase in core earnings per share.

Wall Street analysts expect earnings before items of $4.59 a share in
2002 and $4.98 a share in 2003.

Underlying operating income in the company's domestic tobacco business
fell 3.7 percent to $1.5 billion, with lower volume and higher
promotional spending partially offset by higher pricing.

In the international tobacco division, however, underlying operating
profit rose 8 percent to $1.6 billion, driven by higher pricing, lower
costs and favorable currency translations.

Source : Newsday
URL : http://www.newsday.com/business/nationworld/wire/sns-ap-earns-philip-morris1017oct17,0,4312887.story?coll=sns-ap-business-headlines