Marlboro maker Philip Morris International Inc cut its full-year earnings forecast on Thursday, hurt by the pullback of its Russian operations, higher costs and a sluggish recovery in its Asian duty-free business.
The tobacco giant took a charge of 3 cents per share related to the war in Ukraine in the first quarter, after discontinuing sales of a number of Marlboro and Parliament cigarette products in Russia.
The company, which is working on options to exit Russia, has also canceled product launches for the year and suspended its planned investments there following Moscow's invasion of Ukraine.
Philip Morris' first-quarter earnings fell 3.6% to $2.32 billion (€2.13 billion), or $1.50 per share, including the 3-cent charge.
Russia generated revenue of more than $1.8 billion (€1.7 billion) last year for Philip Morris, around 6% of the New York-based company’s global sales.
Philip Morris also slashed its forecast for 2022 adjusted earnings per share to between $5.45 and $5.56 from between $6.12 and $6.30 estimated earlier, as soaring costs wreak havoc on corporate earnings across sectors.
Separately, a Reuters review of business registries and sanctions lists showed a longtime Russian business associate of Philip Morris, Igor Kesaev, had been sanctioned in Europe for aiding Moscow's Ukraine invasion.
In December of last year, the tobacco giant announced plans to reach its target of 50% sales from smoke-free products by 2025 through organic revenue growth rather than mergers and acquisitions. The company has spent more than $8 billion (€7.08 billion) on reduced risk products since it began developing them a decade ago.