Philip Morris International Inc. (NYSE:PM), the seller of Marlboro cigarettes overseas, dropped in pre-market trade after cutting its full-year earnings forecast on the back of currency fluctuations.
Shares were down 2.5 percent at $86.68 at 8:15 a.m. in New York.
The company, based in New York and Lausanne, Switzerland, now foresees full-year earnings between $4.87 and $4.97 per share, according to a statement today. Its previous forecast was for $5.09 to $5.19 per share.
Philip Morris and its competitors like Imperial Tobacco Group (OTCMKTS:ITYBY) and British American Tobacco (OTCMKTS:ITYBY) are grappling with declining sales in a number of markets due to increasing government regulation and more health-aware consumers, as well as smuggling and an economic downturn.
“2014 is proving to be a complex and truly atypical year for PMI," Chief Executive Andre Calantzopoulos said in the statement. "We continue to face significant currency headwinds, an improving but weak macro-economic environment in the European Union and known challenges in Asia."
The company forecast a 2 to 3 percent fall in 2014 total cigarette industry volume, excluding China and United States.
Philip Morris International said it is planning to end cigarette production at its plant in Bergen op Zoom, Netherlands, by Sept. 1. The company said the factory closing will likely result in a pretax charge of about 24 cents per share. It expects the majority of the charge to be recorded in the second quarter.
The cigarette marker is also stopping cigarette production in Australia by year's end, which is expected to result in a charge of a penny per share in the first quarter.
However, on an adjusted basis, earnings per share are projected to increase in the range of 6 percent to 8 percent from adjusted earnings per share of $5.40 in 2013.
Wall Street expects the company to report profit per share of $5.25 in fiscal 2014.
The company also announced its acquisition of 100 percent of Nicocigs Ltd, a U.K.-based maker of e-cigarettes.
As the development of electronic cigarettes and reduced-risk products accelerates, the tobacco industry is at “the early stages of a transformational process,” the CEO told investors today at a presentation in Lausanne.
