Philip Morris Int'sl 1Q profit rises 29 pct, tops estimates

The company that sells Marlboro and other cigarette branbds outside the United States also said it will acquire several fine-cut brands from Imperial Tobacco Group PLC for 254 million euros ($405 million). They include Interval, Bergerac, Van Nelle and Picadura.

PMI said it earned $1.87 billion, or 89 cents a share, in the first three months of the year, up from $1.445 billion, or 69 cents a share, in the same period last year.

Analysts polled by Thomson Financial expected profits of 77 cents per share.

Full-year earnings are predicted to rise by 14-16 percent in 2008, PMI said in a statement from New York.

"We continue to witness an improvement in our business fundamentals as evidenced by the double-digit revenue and income growth recorded in each of our geographic segments," chairman and chief executive Louis Camilleri said.

"While we continue to face some challenges in certain markets, I am confident that we have the appropriate strategies and resources in place to deal with them effectively," he added.

PMI said it shipped 2.2 percent more cigarettes during the first quarter than the previous year.

Growth was strongest in Asia, with shipments up 10 percent, while the European Union declined by 5.9 percent.

PMI was spun off to Altria Group shareholders last month. Altria's Philip Morris USA continues to operate in the United States.

The breakup freed the larger PMI from legal and public relations concerns in the United States, where it has been involved in several class action lawsuits brought by smokers who say they were sickened by its products.

PMI, which is based in Lausanne, Switzerland, operates in more than 160 countries. It had revenue of $55.1 billion in 2007, compared with Philip Morris USA's $18.49 billion.

Besides Marlboro, PMI makes L&M and Bond Street brands, as well as other products tailored to local markets such as the clove-based Marlboro Mix 9 in Indonesia and Marlboro Fresh Mint and Crisp Mint in Hong Kong.

In its announcement on the purchase, PMI said the fine-cut tobacco brands being acquired account for about 2 percent of the fine-cut market in the EU. The European Union required Imperial Tobacco to make the divestments when it bought Altadis.

PMI shares slipped 0.6 percent to 51.75 Swiss francs ($51.36) traded on the Zurich exchange were down .