Cigarette maker Philip Morris International Inc.'s net income grew nearly 13 percent in the first quarter because it sold more cigarettes at higher prices.
The seller of Marlboro and other brands overseas also raised its earnings outlook Thursday. Its shipments grew 1.6 percent from last year's first quarter to 207.9 billion cigarettes.
Net income rose to $1.92 billion, or $1.06 per share, for the period ended March 31. That compares with $1.7 billion, or 90 cents per share, in the year-ago period.
Excluding excise taxes, revenue rose 4.5 percent to $6.8 billion.
Analysts polled by FactSet expected earnings of $1.04 per share on revenue of $6.95 billion.
The company, which has offices in in New York and Lausanne, Switzerland, increased its full-year earnings forecast to between $4.55 and $4.65 per share. Analysts had expected $4.48.
Its shares rose $1.50, or about 2 percent, to $67.98 in morning trading Thursday.
"Overall our competitiveness is strong and our business is in good shape," CFO Hermann Waldemer said in a conference call with investors.
Especially important were large gains in cigarettes sold Asia, including Indonesia, Korea and Thailand, and the favorable impact of acquiring Fortune Tobacco Co. in the Philippines.
Shipments fell 7.3 percent in the European Union, 5.5 percent in Latin America and Canada, and nearly 1 percent in Eastern Europe, the Middle East and Africa.
Total Marlboro shipments fell 2.9 percent to 68.6 billion cigarettes in the quarter, mainly because of declines in the European Union.
Philip Morris International said its market share increased or remained stable in many key areas.
The company also said it made a $42 million deal in March to acquire International Tobacco & Cigarettes Company Ltd. In Jordan. It said the deal expands its manufacturing footprint in the Middle East.
The deal is expected to close next month. The company will locally produce its brands, as well as newly acquired brands like Kareem, Mercury, Noble and Polo Club.
Smokers face tax hikes, bans, health concerns and social stigma worldwide, but the effect on cigarette demand generally is less stark outside the United States. Philip Morris International has compensated for volume declines by raising its prices and cutting costs.
The company's earnings also were helped slightly by foreign exchange rates for the U.S. dollar. When the dollar is falling, companies that sell goods internationally and must convert revenue from foreign currencies usually increased dollar value for that revenue.
That effect is particularly strong for Philip Morris International, because it does all its business overseas.
The company also said it spent $1.36 billion to buy back 22.2 million shares of stock in the quarter. It plans share repurchases of about $5 billion in 2011 as part of its three-year, $12 billion buyback program that began last May.
Philip Morris International is the world's second-biggest cigarette company after the state-controlled China National Tobacco Corp.
Altria Group Inc. in Richmond, Va., owner of Philip Morris USA, spun off Philip Morris International in 2008. Altria is the largest U.S. cigarette seller.