Philip Morris International Inc. (NYSE: PM) is presenting at the Morgan Stanley Global Consumer & Retail Conference in New York.  An SEC filing shows that Chairman & CEO Louis Camilleri is reaffirming last month’s guidance targets.  What is more important is the outlook for smoking rates.  Many investors still consider smoking on an international basis a growth business, but the company is seeing declines.

The international tobacco giant sees organic volumes declining by 2.0% to 2.5% in 2010 and the company is expected to show its outlook for 2011 to 2013 in OECD and non-OECD markets.  Before considering that smoking is on the way out, not all markets are shrinking.  The company says volume is growing in select markets and how the focus on Marlboro is increasing market share.

The guidance was reaffirmed from October 21 for growth of 20% to 22% to a range of $3.90 to $3.95 EPs for 2010; excluding currency that earnings growth rate will be about 16% to 18%.  To grow profits annually, the company has outlined how managing costs, investments, and regulations all have to be managed.  The government budget excise taxes are expected to rise in Europe and beyond, with tax increases expected in Russia, Mexico, and elsewhere.

Altria Group Inc. (NYSE: MO) has managed to weather tighter regulation and billions upon billions in fines while the number of smokers in America continues to decline.

Some other factoids from the presentation slides from Phillip Morris International:

• Organic volume softness driven by economic downturn and some disruptive tax increases;
• Net revenue growth expected to be solid from 2011 to 2013;
• Less pressure anticipated on tobacco leaf costs from 2011 to 2013;
• Focus on cost controls and productivity gains from 2011 to 2013;
• Marlboro brand leadership was 302 billion units in 2009;
• Marlboro market share growth seen in Mexico, Korea, Japan, Poland, North Africa, and Italy;

Full slide show showing 2011 to 2013 targets is here.

JON C. OGG

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