Marlboro maker Philip Morris International Inc cut its full-year profit forecast on Thursday, hit by rising tobacco leaf prices, energy and labour costs.
Shares of the company fell about 2% in premarket trade.
The company's margins have been strained in the last few quarters due to these costs which were driven by lingering industry-wide supply chain challenges further aggravated by the Russia-Ukraine crisis.
The adjusted operating income margin during the first quarter dropped by 5.8 percentage points pressured by higher logistics and energy costs.
A Truly Global Smoke-Free Champion
Jacek Olczak, chief executive officer of Philip Morris International added, "We continue to successfully integrate Swedish Match, which delivered impressive – and accretive – results, accelerating our transition to a majority smoke-free company.
"The outstanding performance of ZYN in the US complemented the positive momentum of IQOS, including the excellent traction of ILUMA across launch markets, and reinforces our position as a truly global smoke-free champion."
The Marlboro maker sees adjusted full-year profit per share of $6.10 to $6.22, down from its previous forecast of $6.25 to $6.37.
The Stamford, Connecticut-based company's revenue rose 3.5% to $8.02 billion (€7.3 billion) in the quarter ended 31 March, but missed analysts' estimates of $8.11 billion (€7.4 billion), according to Refinitiv IBES data, hurt by lower cigarette shipment volumes.
In January, Philip Morris International announced a long-term collaboration with South Korean tobacco and nicotine manufacturer, KT&G.
The announcement follows three years of partnership between the companies, which has seen PMI commercialise KT&G’s products in more than 30 markets.
News by Reuters, additional reporting by ESM – your source for the latest A Brands news. Click subscribe to sign up to ESM: European Supermarket Magazine.