Earlier today, cigarette manufacturer and marketer Philip Morris International Inc. (PM) reported better-than-expected third-quarter results, benefiting from price increases in some markets. Earnings per share came in at 93 cents, 3 cents above the Zacks Consensus Estimate. On a year-over-year basis, Philip Morris’ earnings per share was flat (excluding a tax benefit of 8 cents in 2008), while net revenues declined 4.6% to $16.6 billion, attributable to unfavorable currency translations and weak results in the European Union (EU), Eastern Europe and Middle East & Africa (EEMA) markets. Revenue, Volumes & Margins On an organic basis (excluding currency and acquisitions), revenues increased 4.1% driven by favorable pricing. Cigarette volume was down almost 3% year-over-year to 219.3 billion units, mainly because of declines in EU, EEMA and Asia. The first two regions were adversely affected by the economic crisis (especially in Spain and Ukraine) and unfavorable comparisons ...

Philip Morris International (PMI) entered into an agreement to acquire 100% of the shares of privately owned Colombian cigarette manufacturer Productora Tabacalera de Colombia, Protabaco Ltda. (Protabaco), for $452 million. Protabaco is the second largest tobacco company in Colombia, with an estimated volume of 6.1 billion cigarettes and an approximate market share of 31.8% in 2008, with leading brands such as Mustang, Premier and President. The acquisition is believed to be a strategic business fit, in order to build on the company’s business in Columbia. The deal is expected to be marginally accretive to PM’s earnings and is expected to close in the second half of 2009. However, final approvals are still pending. In 2005, the company had acquired another Columbian company, Compañía Colombiana de Tabaco S.A. (Coltabaco). In addition, with increasing regulation over tobacco, there has been a shift towards smoke free tobacco products ...

The most fundamental tenet of investing is that risk and reward go hand in hand. The greater the potential reward, the greater the risk. The lower the risk, the lower the reward you can expect. This leads many investors to believe that the surest way to make big gains in the stock market is to take big risks (even if they don’t think what they are doing is risky). But it’s not true. In fact, the biggest gains in the stock market, by far, come from the safest stocks.

I will prove it to you. And I will also show you how to make 10-20 times your money in addition to 20% - 30% annual yields, while owning a portfolio that allows you to sleep soundly at night.

Many people assume that the majority of the stock market’s return over time has come from capital gains – growth companies that start

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Right now investors are fleeing safe-haven assets like U.S. Treasuries and the dollar. And they’re putting the capital back to work in the riskiest of investments - emerging markets and IPOs.

Hard to believe. But here’s the proof…

In the first week of May, $4 billion found its way back into emerging markets funds - the eighth-largest weekly inflow on record, according to Merrill Lynch. And year-to-date the FTSE Renaissance IPO Composite Index is up 17.5%, torching the impressive 7.3% run-up by the Nasdaq.

If you ask me, that’s pretty convincing: Our appetite for risk is back. And the current rally could very well continue.

Of course, I know some of you feel otherwise. You’re afraid of a George Costanza shrinkage incident and would rather tiptoe back into equities. If that’s the case, let me share some information about the stock Lorillard, Inc. (NYSE: LO), because I’m convinced it will head

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Lorillard, Inc. (NYSE: LO): Five Reasons This Stock Will Smoke The Markets

by Louis Basenese, Advisory Panelist Senior Analyst, The Oxford Club

Right now investors are fleeing safe-haven assets like U.S. Treasuries and the dollar. And they’re putting the capital back to work in the riskiest of investments - emerging markets and IPOs.

Hard to believe. But here’s the proof…

In the first week of May, $4 billion found its way back into emerging markets funds - the eighth-largest weekly inflow on record, according to Merrill Lynch. And year-to-date the FTSE Renaissance IPO Composite Index is up 17.5%, torching the impressive 7.3% run-up by the Nasdaq.

If you ask me, that’s pretty convincing: Our appetite for risk is back. And the current rally could very well continue.

Of course, I know some of you feel otherwise. You’re afraid of a George Costanza shrinkage incident and would rather tiptoe back into equities.

...

Philip Morris International Inc. (PM) rose marginally in morning trade to move past a short-term level of resistance at $36.24. The consensus estimate on the company's full-year earnings has gone up by 2 cents per share to $2.99 in the past week. The most accurate estimate, however, is more bullish at $3.02 a share. Philip Morris is a Zacks#2 Rank ("Buy") stock.

Zacks Investment Research

Philip Morris International Inc. (PM) announced first-quarter profit that topped analysts' expectations, and also backed its 2009 earnings guidance.

The cigarette maker's earnings of 74 cents per share were 5 cents ahead of the consensus, as results were boosted by its Asian, Latin American and Canadian markets. Revenue came in at $5.6 billion.

The company's total shipment volume of 203.4 billion units in the quarter was unchanged.

Philip Morris sees full-year earnings between $2.85 and $3 per share. Earlier in February, the company indicated that the firmer dollar would reduce earnings by 80 cents per share this year.

The last month has seen 3 out of 13 covering brokerage analysts raise their expectations, pushing the 2009 average earnings forecast up 2 cents to $2.96 per share. Next-year's estimate advanced to $3.33 from $3.30 in the same period.

Shares of this Zacks #2 Rank ("Buy") company are slightly higher

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Philip Morris International (PM) has a history of strong operating and financial performance as part of Altria (MO). Management has a credible strategy of growing EPS in the range of 10% to 12% and returning a substantial portion of the company's cash flow to shareholders.However, Philip Morris International has experienced an adverse mix shift as lower margin markets have grown faster than the company's average. In addition, the company is exposed to risks from litigation and increased smoking restrictions.Lastly, the European Union tobacco market has remained weak. The Hold rating is maintained. Our current target price is $40.50. Read the full analyst report on "PM"Read the full analyst report on "MO"Zacks Investment Research

Altria Group Inc. (MO) advanced nearly 5% on Thursday as investors thought the company's decision to raise the price of Marlboro and other premier brands by 71 cents a pack will help the cigarette maker's profits.

Altria said the price increases, which will be effective from March 9, are due to costs related to the upcoming raise in federal excise tax on cigarettes to $1 from 39 cents per pack. Last month, Philip Morris also raised prices by about 9 cents per pack.

However, the company plans to cut prices for the smokeless tobacco brands it acquired through its purchase of UST Inc. by 62 cents per tin to compete better in the U.S. tobacco market, which has seen declining volumes amid higher taxes and bans on smoking in public places.

Altria was trading up 4% to $15.69 at noon on the New York Stock

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This post is a guest contribution by Vitaliy N. Katsenelson*, author of Active Value Investing: Making Money in Range-Bound Markets and director of research at Investment Management Associates.

The stock market has dropped. Corporate profits have collapsed. And profit margins have reverted toward the mean. What is next?

Before I dive into the discussion, let me explain the chart below, which I named appropriately, “The pain of mean reversion.”

I looked at reported earnings for S&P 500 and compared them to the “average case” earnings scenario. In the “average case” scenario I took reported earnings of S&P 500 in the early 1990s and grew them at 6% – an average growth rate of GDP over the last century which happens

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