Tobacco Sector Slumps After Philip Morris Slashes FY14 Outlook
Shares in tobacco stocks fell Thursday after Philip Morris (NYSE: PM) lowered its fiscal 2014 earnings outlook by more than four percent.
Philip Morris Chief Executive André Calantzopoulos further warned that discounting in Australia could result in results "at the lower end" of expectations now calling for $4.87 to $4.97 per share for 2014 earnings.
Wall Street was looking for $5.25, and as recently as May 7, the company forecast earnings of $5.09 to $5.19 per share.
The new outlook suggests earnings growth of six percent to eight percent over 2013 results of $5.40 per share.
Calantzopoulos blamed currency headwinds, an improving but weak economic environment in Europe and "known challenges" in Asia.
Separately, Nielsen data suggest that Italian cigarette retail volume fell 1.2 percent in May following a gain of 2.2 percent in April, according to Bank of America analyst Lisa K. Lewandowski.
Philip Morris shares have dropped 2.7 percent to $86.51.
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