Investing.com -- Shares in Philip Morris International (NYSE:PM) Inc. (PARIS:PMIN) surged nearly 9% on Thursday after one of the world's largest cigarette companies vastly outperformed analysts' forecasts in its first quarter earnings.
While Philip Morris' diluted earnings per share fell slightly by 0.02 to 1.16 for the period, the New York-based company beat estimates for the quarter by 0.15 a share. The company's preponderance of international smokers also tamped earnings, as unfavorable exchange rate losses stemming from a stronger dollar led to a 0.31 decrease in earnings per share, according to Philip Morris.
In total, Philip Morris posted a net income of $3.0 billion, down by 2.2% on a year-over-year basis. The inauspicious effects of foreign exchange rates abroad were responsible for creating $585 million less in net profit compared with the same period in 2014, Philip Morris calculated.
Although Philip Morris increased sales in Latin America and Canada by 14.2% for the quarter, it only reported a spike of 1.8% when currency fluctuations were factored. Philip Morris is looking to maximize sales in Mexico, after its total cigarette market increased by 4.7% during the quarter to 7.5 billion units. Philip Morris sales also rose by an adjusted total of 14% on a currency neutral basis in Eastern Europe, the Middle East and Africa, but were down 8.3% without the adjustment.
“Our strong first-quarter results are an excellent start to the year," CEO André Calantzopoulos said in a statement. “Our organic volume and market share performance was better than we originally forecast, underpinned by the investments we made in 2014 and an improving operating environment this year."
"While currency volatility persists, we remain focused on managing our cash flow prudently and are steadfast in our aim to return around 100% of our free cash flow to our shareholders," he added.
Since its spin-off from Altria Group (NYSE:MO) in 2008, Philip Morris said it has increased its regularly quarterly dividend by 117.4% from an initial annualized rate of $1.84 per common share.
Philip Morris is also counting on its newly-acquired e-Cigarette division to boost sales for the remainder of the year. Last July, the company acquired Nicocigs, the largest e-Cigarette brand in the United Kingdom. Nicocigs is projected to earn $560 million in revenue in 2015, up from a projected total of $417 last year.
Shares in Philip Morris, the second-highest performer on the S&P 500 on Thursday, gained 6.83 or 8.74% to 84.96.