As the popularity and usage of vapor cigarettes rises, it is no surprise that sales of tobacco cigarettes will start to suffer. Philip Morris International Inc. (PM) has recently forecasted lower-than-expected profits for 2014. In a presentation to their investors, they cite the decline is due to headwinds from currency fluctuations and challenges in the tobacco industry.
In addition, Philip Morris stated that their troubles in Europe and Asia (specifically offering discounts in Australia), along with changes to production cuts, will also have an effect on earnings.
Philip Morris expects their full-year-per-share earnings (EPS) to be in the range of $4.87-4.97. This number is down from their previous prediction of EPS of $5.09-5.19. This announcement sent Philip Morris shares down.
This decrease in profit is including a charge of $495 million coming from the anticipated closure of their production company in the Netherlands set to occur sometime later this year. The decision to close their production facility in the Netherlands stems from challenges in Europe—specifically, problems relating to a lag in growth. This has led Philip Morris to slash their operations on the continent. Currency fluctuations in Asian developing countries have also been a drag on Philip Morris’ earnings in recent years.
As people are becoming more health conscious, the sale of cigarettes has declined worldwide. While Philip Morris is the largest tobacco company, they have not been immune to the major shift in the tobacco industry.
Vapor cigarettes and electronic smoking are one the reasons for this decline in sales.
The smoke-free nicotine delivery devices have caused concern in the long-term for the major tobacco companies. That said, most have begun moving into the vapor cigarette business themselves in order to arrest the decline. For example, Philip Morris recently announced the acquisition of Nicocigs, Ltd, a UK-based vapor cigarette company.
Even with the decline in the tobacco industry, Philip Morris is the largest publicly traded tobacco company. They are the worldwide maker and seller of Marlboro cigarettes.
If you’re looking for a smoke-free alternative, vapor cigarettes may be your answer.
Please visit our main site to browse our selection of both starter kits and disposable vapor cigarettes. In addition, you can also browse our blog and knowledge center for helpful tips and insights about this revolutionary way to get the nicotine your body craves without many of the risks of traditional methods.