Marlboro maker Philip Morris cuts 2014 earnings forecast

Reuters - UK Focus

* Cuts 2014 profit est to $4.87-$4.97 per shr from$5.09-$5.19 per shr

* To buy UK-based e-cigarette maker Nicocigs

* Expects to launch a proprietary e-cigarette in 2016 (Adds details from statement, background)

June 26 (Reuters) - Cigarette maker Philip MorrisInternational Inc cut its earnings forecast for 2014 andsaid it is proving to be a "complex and truly atypical" year forthe company.

Philip Morris and its rivals like Imperial Tobacco Group and British American Tobacco (LSE: BATS.L - news) are grappling withdeclining sales in a number of markets due to increasinggovernment regulation and more health-aware consumers, as wellas smuggling and an economic downturn.

The maker of Marlboro cigarettes said it now expects to earn$4.87-$4.97 per share for 2014, lower than the $5.09-$5.19 pershare it expected earlier and $5.26 it earned in 2013.

"We continue to face significant currency headwinds, animproving but weak macro-economic environment in the EuropeanUnion and known challenges in Asia," Chief Executive AndreCalantzopoulos said in a statement.

However, Philip Morris expects adjusted profit in 2014 torise 6 to 8 percent from the $5.40 it reported last year.

The company forecast a 2 to 3 percent fall in 2014 totalcigarette industry volume, excluding China and United States.

Philip Morris also said it acquired Nicocigs Ltd, aU.K.-based e-cigarette maker to get access to the growinge-cigarette category in the U.K. market. Financial terms werenot disclosed, but the company said the deal is not material toits 2014 results or cash flow.

The company, which plans to launch a proprietary e-cigarettein 2016, said its reduced-risk products are expected to add toits bottom line within next three to four years.

Philip Morris said last year it would enter the e-cigarettebusiness in the second half of 2014 to tap fast-growing demandfor a less harmful alternative to cigarettes.

The company teamed up with Altria Group (NYSE: MO - news) in 2013 tomarket electronic cigarettes and other "reduced risk" tobaccoproducts.

Less dangerous alternatives to cigarettes are a key focusfor big tobacco firms as governments worldwide crack down andconsumers cut back consumption.

Philip Morris shares closed at $88.89 on the New York StockExchange on Wednesday. (Reporting by Anannya Pramanick in Bangalore; Editing byGopakumar Warrier)

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