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Tobacco lights up Philip Morris results

Larry Black
Tuesday 19 April 1994 23:02 BST
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PHILIP MORRIS, the big tobacco to foods group that triggered last year's cigarette price war, surprised Wall Street yesterday with a strong recovery in tobacco profits.

The company earned almost as much during the first three months of the year as it did a year ago, before its controversial decision to slash the price of its best-selling brand, Marlboro.

Philip Morris made dollars 1.17bn (pounds 790m), or about dollars 1.34 a share, compared with dollars 1.2bn, or dollars 1.38 a share, during the first quarter of 1993.

The market had been expecting a profit of about dollars 1.25, and pushed Philip Morris shares up 7 8 to 511 8 . The group's overall turnover was dollars 15.5bn against dollars 15.2bn the year before.

Domestic tobacco earnings remain 25 per cent below a year ago, but margins continue to improve as shipments of Marlboro and its other premium brands increase.

Philip Morris has sold 32 per cent more Marlboros this year than it did at the beginning of 1993, pushing its share of the US market up more than five points to 27 per cent.

Sales at its foods divisions were roughly flat, with North American revenues down slightly to dollars 5.2bn because of the sale of its frozen desserts and frozen vegetables businesses.

International sales were up 2.7 per cent at dollars 2.2bn.

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