Philip Morris Profit Up 7.5% in Quarter

Philip Morris Cos., the world’s largest tobacco company, said fourth-quarter earnings rose 7.5%, helped by price increases on its cigarettes and income growth in its Kraft unit.

Profit from operations at last year’s top performer in the Dow Jones industrial average rose to $1.95 billion, or 87 cents a share, from $1.81 billion, or 77 cents, a year ago. Revenue edged up 1.6% to $19.39 billion.

Analysts had forecast earnings of 88 cents a share, the average estimate in a poll by First Call/Thomson Financial.

Profit in the company’s cigarette business rose 5% in the U.S. even as sales declined 1.8%. International tobacco earnings rose 4.5% as shipment volume grew 5.4%.

Philip Morris’ latest earnings figures did not include Nabisco Holdings Corp., which the company bought in December. At the Kraft Foods unit, profit grew 8.5% in North America, bolstered by a 7.7% sales gain and lower commodity costs, and net income jumped 16% internationally.

Income at Miller Brewing dropped 31.4% to $59 million on a 9.5% decline in shipment volume and higher marketing expenses.

For the full year, earnings rose 11% to $8.5 billion, or $3.75 a share, matching Wall Street expectations, on a 2.3% increase in revenue to $80.4 billion.

The company said it expects earnings for 2001 to rise between 9% and 11%, including the Nabisco acquisition. Analysts had forecast a 10% rise to $4.09, the average estimate according to First Call.

Philip Morris shares closed off 91 cents at $44 on the New York Stock Exchange.

The shares have more than doubled in the last year as the tobacco industry won several smoking-related lawsuits and George W. Bush was elected president. Investors have speculated that the Bush administration may eliminate tobacco excise-tax increases and drop the federal government’s lawsuit against U.S. cigarette makers.

At a Glance

Other earnings, excluding one-time gains or charges unless noted, include:

* Coca-Cola Co.’s fourth-quarter profit rose 36% to $1.04 billion, or 42 cents a share, helped by higher prices for its syrup concentrate. Sales were virtually flat at $4.9 billion. Global case sales rose 3%, matching the company’s forecast. Analysts were expecting a gain of 3% to 5%. Coca-Cola said it still expects to increase volume sales of beverages by 6% to 7% this year, with case sales up 4%.

* Genuity Inc., a provider of Internet services, reported a wider loss for the fourth quarter and lowered forecasts for 2001. The company’s fourth-quarter loss was $284.1 million, or 29 cents a share, compared with a loss of $182.8 million, or 23 cents, a year earlier, as expenses rose. Revenue rose 55% to $312.8 million. Sales growth is expected to slow to 40% this year, missing previous forecasts of 55% to 65%, the company said.

* Harman International Industries Inc. said profit rose 8.5% in its fiscal second quarter to $24.2 million, or 72 cents a share, missing analyst forecasts of 76 cents, as sales declined 3% to $438.2 million. The company, best known for its high-end JBL loudspeakers and Harman Kardon audio components, also said its earnings will fall far short of expectations in the third quarter due to a slump in multimedia sales.

* Linens ‘n Things Inc. said fourth-quarter profit rose 20% to $34.5 million, or 84 cents a share, matching forecasts, on a 20% jump in sales to $495.6 million. The home-accessories and housewares chain also said it plans to add 60 to 65 stores this year nationwide, including one in Northern California. The retailer now has 283 stores in the U.S. and Canada. The company said it expects to meet profit forecasts in the first and second quarters but said full-year 2001 earnings likely will be about $1.92 a share, less than the $1.97 average estimate of analysts polled by First Call/Thomson Financial.

* New York Times Co.’s profit rose 31% to $137.8 million, or 83 cents a share, as sales rose 7% to $951.5 million. Ad revenue in the newspaper group rose 3.2%. Sales in the broadcast division rose 15%. Separately, the company announced the sale of its magazine group, which consists of four golf titles including Golf Digest, to Advance Publications Inc., completing its exit from the magazine business. Terms were not disclosed.

* Owens-Illinois Inc. said its fourth-quarter earnings fell to 12 cents a share from 24 cents a year ago, meeting lowered forecasts, as sales declined 3% to $1.33 billion. The maker of glass and plastic containers blamed higher energy costs, unfavorable foreign exchange rates and higher interest rates. Owens also said profit will miss expectations in the first quarter.

* WebMethods Inc., maker of system integration software, reported a profit of $2.7 million, or 5 cents a share, for its fiscal third quarter, contrasted with a loss of $5.9 million, or 13 cents, a year ago, as it added larger corporations to its customer base. The results far exceeded analyst expectations of a penny. Revenue climbed 237% to $59.4 million. For the fourth quarter, the company forecast earnings of 6 cents, rather than the 2 cents analysts had predicted, and boosted its revenue outlook by $11 million to $67 million. For the year 2001, it now expects revenue of about $205 million, up from the previous guidance of $185 million to $190 million.

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Bloomberg News contributed to this report.

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Earnings Preview

A sampling of companies expected to report today, ranked by year-over-year earnings-per-share (EPS) growth, compiled by First Call/Thomson Financial.

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Ticker Analysts’ Year-ago Predicted Company symbol estimated EPS quarter pct. chg. Reebok RBK $0.07 $0.01 +600% Anadarko Petro APC 1.58 0.24 558 Entergy ETR 0.20 0.08 150 Apache APA 1.95 0.80 144 Noble Drilling NE 0.38 0.16 138 Barrick Gold ABX 0.25 0.20 25 Quaker Oats OAT 0.37 0.33 12 Colgate-Palmolive CL 0.45 0.41 10 Kilroy Realty KRC 0.70 0.65 8 TJX TJX 0.46 0.44 5 Snap-on SNA 0.64 0.76 -16 TXU TXU 0.60 0.72 -17 Sprint FON 0.39 0.49 -20 American Power APCC 0.23 0.34 -32 Nucor NUE 0.74 1.12 -34 Copper Mtn CMTN 0.00 0.12 -100 Verizon VZ 0.77 NM NM Mattel MAT 0.26 -0.04 NM Sprint PCS PCS -0.53 -0.75 NM Ticketmaster Online TMCS -0.12 -0.18 NM

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Notes: NM = not meaningful. A loss in any period makes percentage change not calculable.

Year-over-year growth and percentage changes are based on earnings-per-share figures and may differ from percentage changes based on total profit.

For more information on First Call, check www.firstcall.com.