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Non-Tech : Philip Morris - A Stock For Wealth Or Poverty (MO) -- Ignore unavailable to you. Want to Upgrade?

To: Jim Oravetz who wrote (6338)	7/18/2002 12:08:42 PM
From: Jim Oravetz	Respond to of 6439

Philip Morris Says Net Rose But Reins in 2002 Projection A WALL STREET JOURNAL ONLINE NEWS ROUNDUP NEW YORK -- Philip Morris Cos. said its second-quarter profit rose 14%, but the food and tobacco giant warned that full-year earnings growth likely will come in at the low end of its previous forecasts. The company on Thursday posted net income of $2.61 billion, or $1.21 a share, compared with 2.29 billion, or $1.03 a share, in the same quarter last year. Philip Morris said it expects full-year earnings-per-share growth at the low end of its 9%-11% estimate because it plans to spend about $350 million on marketing premium brands. Philip Morris, which is based in New York, said "underlying" earnings rose 8% to $2.68 billion, or $1.24 a share, in the latest period. Underlying earnings exclude the cumulative effect of the change in accounting for derivatives and hedging activities, and assumes the initial public offering for the Kraft Foods Inc. division took place Jan. 1, 2001, instead of later that year. Underlying earnings also treat the mandated cessation of routine goodwill amortization as if the new accounting standards were in effect in 2001. On that basis, analysts were looking for earnings of $1.23 a share, according to Thomson First Call. Revenue edged up 1.5% to $21.1 billion from $20.79 billion. In the domestic tobacco business, shipments fell 14% to 46.2 billion units. Philip Morris blamed inventory depletions following price increases in April, and different timing of promotions compared with the year-earlier quarter. The company said its retail share declined slightly to 50.2%, due primarily to a drop in market share for Merit, Benson & Hedges and Cambridge brands. At the same time, the combined retail share for its Marlboro, Parliament, Virginia Slims and Basic brands rose slightly, to 47.3%, fueled by the growth of Marlboro and Parliament. Philip Morris's international tobacco business benefited from volume gains and higher pricing, partly offset by the impact of unfavorable currency translations. Volume growth was strong in Asia, Eastern Europe and Turkey, and the company said it gained market share in most major markets. The company said that part of the planned $350 million investment in premium-brand marketing will be funded by "currency favorability that we expect to realize in the second half of this year." Underlying operating income for Miller Brewing Co. edged up 0.6% to $169 million, amid higher pricing, partly offset by lower volume and significantly higher marketing expenses for new, flavored malt beverages. Domestic shipment volume fell 2.5% while international volume rose 15%, driven by increases in Mexico, Russia and the United Kingdom. During the quarter, Philip Morris announced an agreement to sell the Miller Brewing unit to South African Breweries PLC of London, forming SABMiller PLC. Philip Morris said Thursday that the transaction closed July 9, and it received 430 million shares of SABMiller PLC valued at $3.38 billion. Separately, Kraft Foods on Wednesday reported net income rose 78% from year-earlier results that were held back by interest and other debt expense as well as goodwill amortization. The Northfield, Ill., food concern reported income of $901 million, or 52 cents a share, compared with $505 million, or 33 cents a share, a year ago. Revenue edged up to $7.51 billion from $7.47 billion.