Profit Rises 7.6% for Philip Morris
NEW YORK — Philip Morris Cos., the largest tobacco company, on Wednesday named Chief Financial Officer Louis Camilleri as its leader and reported a 7.6% increase in fourth-quarter profit that matched Wall Street expectations.
Camilleri, 47, will succeed Geoffrey Bible as chief executive and president effective April 25 after the annual shareholders meeting, Philip Morris said.
Bible, will remain chairman until August, when he reaches the company’s mandatory retirement age of 65. At that time, Camilleri will take on the chairman position as well.
Philip Morris, whose products include Miller beer and Kraft foods as well as Marlboro and other cigarette brands, said earnings in the fourth quarter rose to $2.16billion, or 99 cents a share, from $2.01 billion, or 90 cents, a year earlier. Sales rose 13% to $22 billion, helped by an increase in cigarette prices.
Camilleri will take the reins at Philip Morris after profit rose every year but one since Bible became CEO in 1994.
“He’s been involved in all the company’s high-level decisions,†said Thomas Russo, a partner at Gardner Russo & Gardner, which had 1.82 million Philip Morris shares as of September. “He understands all aspects of the company.â€
During Bible’s tenure, Philip Morris shed less profitable businesses such as Log Cabin Syrup to focus on boosting profit and sales at the tobacco and Miller units. The company also shed many lawsuits.
The company is being challenged by low-priced private-label cigarette brands for new customers in the United States, its largest market, and internationally, investors said.
Camilleri must figure out a way to boost flagging cigarette sales overseas and fend off lawsuits still pending against the company, analysts and investors said.
“The reaction [to Camilleri] is that there’s not going to be any change,†said Keith Patriquin, an analyst at Loomis Sayles & Co., which owned 1.42 million Philip Morris shares as of September. “I’m just happy somebody new isn’t coming in.â€
Camilleri, who analysts said beat out Philip Morris USA CEO Michael Szymanczyk for Bible’s job, will review senior management positions and address employees today, company spokesman Steven Parrish said.
“There’s no timeline†for when other appointments may be announced, Camilleri said during a conference call with investors and analysts. “I expect something to be done before April 25.â€
Camilleri, a smoker of Marlboro Ultra Lights, helped oversee Philip Morris’ $18.9-billion purchase of Nabisco Holdings Corp. in December 2000, the company’s biggest acquisition.
Before becoming CFO in 1996, he worked at the company’s Kraft food and European units.
Camilleri’s experience in dealing with legislators will help as he tackles the company’s legal problems, analysts said.
More than three years after the industry negotiated a landmark $206-billion settlement of health-related claims with 46 states, Philip Morris has hundreds of lawsuits to fight and is under increased scrutiny from countries outside the U.S.
Shares of New York-based Philip Morris fell 22 cents to $49.57 on the New York Stock Exchange.
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Other earnings, excluding one-time items except as noted, include:
* AT&T; Corp. reported fourth-quarter operating profit of $211million, or 5 cents a share, a penny better than analysts’ estimates, but said revenue fell 9.5% as it lost long-distance customers to rivals and phone use declined.
The telecommunications giant said that with one-time items, including a $1-billion write-down in the latest quarter related to job cuts, it had a loss of $1.39 billion, or 39 cents a share, compared with a year-ago loss of $1.64 billion, or 45 cents.
Total revenue fell to $12.59 billion, with consumer long-distance revenue down 18.3%. Revenue in the cable TV operations rose 10.2% to $2.38 billion.
The company expects consumer long-distance revenue to decline in the mid-20% range this year, better than its earlier estimate of a drop of up to 30%. It also said cable revenue should grow in the low to mid-teens in 2002, helping offset the decline in phone sales.
Shares of New York-based AT&T; fell 36 cents to close at $17.45 on the NYSE.
* Electronic Arts Inc. reported profit and revenue growth that handily beat analyst expectations for its fiscal third quarter, helped by sales of “Harry Potter†titles and other new video games. Earnings excluding one-time items climbed 61% to $147.1 million, or $1.03 a share, on a 30% jump in sales to $832.9 million. Analysts were expecting earnings of 89 cents a share on sales of $735million.
* New York Times Co.’s profit fell 31% in the fourth quarter to $76.9 million, or 50 cents a share, matching analysts’ forecasts, amid a slump in advertising. Sales fell 16% to $780.6 million, missing analysts’ expectations of $805.5 million.
* Reebok International Ltd.’s profit fell 16% to $5.17 million, or 9cents a share, but beat analysts’ expectations of 5 cents. Sales rose 6.8% to $664.6 million as higher clothing sales offset declines in shoe sales.
* Tommy Hilfiger Corp.’s fiscal third-quarter profit declined 13% to $37 million, or 41 cents a share, as sales fell less than 1% to $474.8million.
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