Philip Morris Net Rises 9% Despite Price Hikes; Exxon Beats Forecasts

Philip Morris Cos.’ first-quarter earnings rose 9%, paced by stronger sales of its best-selling Marlboro cigarettes even as the company charged higher prices to fund industry legal settlements.

The world’s largest cigarette company said profit rose to $1.93 billion, or 79 cents a diluted share, from $1.77 billion, or 72 cents, a year ago. That matched the average estimate of analysts polled by IBES International Inc.

The company, whose other operations include Kraft Foods Inc. and Miller Brewing Co., said revenue edged up 1% to $18.4 billion from $18.2 billion.

Philip Morris’ U.S. cigarette sales rose more than 2% as industrywide sales declined almost 2%, amid higher prices to help pay for participating in industry settlements with some states and groups of smokers.

Philip Morris saw its share of cigarette sales in the U.S. surpass 50% for the first time, partly on the strength of its new Marlboro Ultra Lights, which have the least tar and nicotine of its Marlboro lines.

Lockheed Martin Corp., the nation’s largest defense contractor, said Tuesday its profit dropped 7% in the first quarter.

Lockheed, which is fighting for federal approval of a $8.3-billion merger with Northrop Grumman Corp., said net income fell to $269 million, or $1.42 a diluted share, a penny above analyst estimates, from $290 million, or a $1.35, a year ago.

The Bethesda, Md.-based company retired 29 million shares in a deal with General Electric Co. in November.

The results reflect Lockheed Martin’s moves to sell businesses that represent more than $2 billion in annual revenue.

Revenue fell 7% to $6.2 billion at Lockheed, which makes the F-16 and F-22 fighters, the Titan and Atlas rockets and the C-130J transport plane. Adjusted for divestitures, sales would have been up 1%, Lockheed said.

At a Glance

Other companies reporting earnings, shown excluding one-time charges and gains unless noted, include:

OIL:

* Exxon Corp. said first-quarter earnings fell, but much less than expected, as improved profit margins outside North America helped the nation’s largest oil company ease the effects of lower crude oil prices.

Net income fell 13% to $1.89 billion, or 76 cents a diluted share, from a year ago. Analysts had expected 66 cents a share.

A 30% decline in the average price of crude from the year-earlier period broke Exxon’s six-quarter string of increased earnings. Strong profit margins on fuel sales in Asia and Europe and a policy of constant cost-cutting helped the company ease the blow of price declines.

* Amoco Corp. reported a 49% drop in profit, as analysts expected, to $386 million, or 40 cents per share, from a year earlier. The per-share amounts reflect a March two-for-one stock split. Revenue fell 15% to $7.61 billion.

TRANSPORTATION:

* Northwest Airlines Corp. said first-quarter earnings rose 10% to $71 million, or 66 cents per diluted share, from a year ago as revenue rose 2% to $2.42 billion. Lower fuel costs helped boost results, which far exceeded Wall Street expectations of 49 cents.

* Helped by lower fuel costs, America West Holdings Corp.’s profit soared 80% to $25 million, or 53 cents per diluted share, far beyond forecasts. Revenue rose 2% to $470 million. Analysts had expected 44 cents a share.

* Burlington Northern Santa Fe Corp. said first-quarter profit rose 55% from a year earlier to $233 million, or $1.47 a diluted share, meeting expectations, as revenue rose 7% to $2.16 billion. The second-largest U.S. railroad company has attracted new business from shippers dismayed with the rail logjam at top competitor Union Pacific Corp.

APPAREL:

* Jones Apparel Group Inc. said first-quarter earnings rose a much better-than-expected 31% to $38.6 million, or 74 cents a diluted share, on higher sales of its Lauren by Ralph Lauren and other name-brand clothing. Revenue rose 19% to $383.8 million.

* VF Corp. said first-quarter earnings rose 11% to $78.1 million, or 62 cents a diluted share, on cost savings and sales of Wrangler and Lee jeans and Vanity Fair lingerie. The results were in line with expectations. Sales rose 5% to $1.33 billion.

OTHER INDUSTRIES:

* Avery Dennison Corp. said its first-quarter earnings rose 16% to $54.2 million, or 52 cents per diluted share, from a year ago. The Pasadena-based maker of self-adhesive products said sales rose 5% to $843.6 million.

* Kimberly-Clark Corp. said first-quarter earnings fell 15% to $310.8 million, or 56 cents a diluted share, from $364.2 million, a year earlier, beating estimates by a penny. The company cited lower-than-expected sales and prices in Europe. Sales fell 6% to $3.05 billion.

* Dial Corp. said first-quarter earnings rose 25% to $22.9 million, or 23 cents a diluted share, from a year ago, matching estimates. The soap and laundry detergent maker’s revenue rose 6% to $335 million.

* Franklin Resources Inc. said earnings rose a smaller-than-expected 25% in the second fiscal quarter to $126.7 million, or 50 cents a diluted share, from a year earlier. Analysts expected 53 cents a share. The San Mateo-based company said assets under management surged to a record but margins were hurt by increased expenses for computer-system conversions to prepare for year 2000 and advertising.

* Honeywell Inc. said its earnings jumped 27% in the first quarter on strong sales and improved profit margins. Honeywell, a maker of controls for the home, industrial, aviation and space markets, earned $96.3 million, or 75 cents per diluted share, compared with $75.6 million, or 59 cents, a year ago. Revenue rose 14% to $1.9 billion.

* Lear Corp. said its first-quarter earnings rose 13%, in line with expectations, to $47.3 million, or 69 cents a diluted share, from a year earlier. The maker of auto seats and interiors said sales increased 18% to $2.03 billion.

* Pacific Enterprises, parent of Southern California Gas Co., reported net income of $40 million, or 48 cents per basic share. Included in these results were $1 million, after tax, or 1 cent per share, of expenses related to the company’s proposed merger with Enova Corp. In the 1997 first quarter, the company had net income of $50 million, or 60 cents per basic share, which included after-tax charges of $3 million, or 4 cents a share, for merger-related expenses.

* Dutch entertainment group PolyGram said its first-quarter profits plunged 88% to $7.5 million because of a lack of major releases at its pop music division. Sales rose 4% to $1.14 billion.

* Republic Industries Inc. said first-quarter earnings more than doubled to $77.1 million, or 17 cents a diluted share, from a year earlier, beating analyst forecasts by three cents a share. Revenue climbed 87% to $3.42 billion.

* SBC Communications Inc. said its first-quarter profits rose a better-than-expected 6%, to $912 million, or 49 cents per diluted share, from a year earlier. Analysts had expected profit of 47 cents a share. Revenue grew 8% to $6.42 billion.