Philip Morris International Inc. (NYSE: PM) reported second-quarter 2015 results before markets opened on Thursday. The tobacco products firm posted quarterly adjusted diluted earnings per share (EPS) of $1.21 on revenue of $6.9 billion. In the same period a year ago, the company reported EPS of $1.41 on $7.8 billion in revenues. Thomson Reuters had consensus estimates for EPS of $1.13 and revenue of $6.73 billion.

Excluding currency translation effects of $0.33 per share, adjusted diluted EPS totaled $1.34.

Total cigarette shipments dropped by 1.3% in the quarter, which the company attributed to declines in shipments to Europe, and in particular Italy. Excluding inventory movements, shipment volumes dropped by 1.6%.

Currency translation effects cost the company $1.22 billion in quarterly revenues. Adjusted operating income totaled $3 billion, down 13.7% year over year.

The company reaffirmed its full-year 2015 EPS forecast as a range of $4.32 to $4.42, compared with full-year 2014 EPS of $4.76. On an adjusted basis, Philip Morris expects diluted EPS to rise by 9% to 11% over last year’s total of $5.02.

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The forecast includes a $0.61 per share reduction due to currency exchange rates and a charge of $0.25 per share related to the closing of Philip Morris’s plants in Australia and the Netherlands. The consensus estimate had called for full-year EPS of $5.14 on revenues of $29.91 billion.

The company’s CEO noted:

Our organic volume trends, market share growth and robust pricing, exemplified by our flagship brand Marlboro, are driving excellent operational performance within an improving macroeconomic environment for our business. … While currency headwinds remain stubbornly high, we are ever focused on the prudent management of cash flow. We are committed to returning around 100% of our free cash flow to shareholders.

Philip Morris pays a quarterly dividend of $1.00 per share, for a dividend yield of 4.9%. The company did not repurchase any shares in the first half of 2015. The company’s free cash flow, excluding the impact of currency translation, totaled $4.06 billion in the second quarter of 2015, up 65.6% compared with the second quarter of 2014.

The company’s shares closed at $82.72 on Wednesday and were inactive in Thursday’s premarket session. The stock’s 52-week range is $75.27 to $90.25. Thomson Reuters had a consensus analyst price target of $86.60 before Thursday’s report.

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