Philip Morris International Inc. (NYSE: PM) reported second-quarter 2013 results before markets opened this morning. The tobacco products firm posted adjusted diluted earnings per share (EPS) of $1.30 on revenue of $7.92 billion. In the same period a year ago the company reported EPS of $1.36 and $8.12 billion in revenues. Thomson Reuters had consensus estimates for EPS of $1.41 and revenue of $8.17 billion.

Currency translation effects cost the company $243 million in revenues. Excluding that effect, Philip Morris’s revenues would have been up 0.5% year-over-year.

Cigarette shipment volume fell 3.9% year-over-year globally and by 16.5% in the Philippines, where a new excise tax cut shipments by more than 6 billion units. European volume fell 8%, and Asian shipments fell 3.5%. The company’s Eastern Europe, Middle East and Africa region also posted a drop of 3.6% in cigarette shipments. The company was able to make up some of the decrease by raising prices.

The company lowered its full-year EPS guidance from a range of $5.55 to $5.65 to a new range of $5.43 to $5.53, compared with full-year 2012 adjusted EPS of $5.22. The forecast includes a $0.19 per share reduction due to currency exchange rates. The consensus estimate had called for full-year EPS of $5.55 (down from $5.73 at the beginning of the year) on revenues of $31.9 billion (down from an original total of $32.37 billion).

The company’s CEO noted:

As expected, despite strong pricing and a robust share performance, our second-quarter results were primarily impacted by lower industry volume in several key markets, as well as the timing of inventory movements in Japan, higher costs, predominantly in Asia, and stiffer currency headwinds. For the second half of the year, we expect volume/mix to improve, pricing to remain strong and our total cost variance, excluding currency, to be flat.

What makes tobacco companies so attractive to investors is their dividend, and Philip Morris pays a quarterly dividend of $0.85. The company repurchased 16.7 million shares of its own stock in the first half of 2013 at a cost of $3.05 billion. Philip Morris plans to spend $18 billion on share repurchases in a three-year program that began in the third quarter of last year. So far the company has spent $5.9 billion on share buybacks. The stock’s dividend yield is 3.8%.

The company’s shares are trading down about 0.8% in the premarket this morning at $89.00. The stock’s 52-week range is $82.10-$96.73. Thomson Reuters had a consensus analyst price target of around $98.80 before today’s report.

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