Philip Morris Names New CEO
NEW YORK â€“â€“ Philip Morris Cos. named chief financial officer Louis C. Camilleri as its new leader Wednesday, ending debate over who would lead the tobacco-food giant in the face of regulatory challenges and smoking lawsuits worldwide.
The company's board said it would elect Camilleri, 47, as president and CEO effective April 25, following the annual stockholders' meeting. He replaces Geoffrey Bible, who will continue as chairman until his scheduled retirement at the end of August.
Philip Morris, whose brands include Marlboro cigarettes, Kraft cheese and Miller Lite beer, also reported a 7.6 percent increase in fourth-quarter earnings Wednesday, due in part to strong tobacco sales. The results met Wall Street's expectations.
"The appointment of Louis Camilleri as my successor ... gives me great confidence," Bible said in a release Wednesday. "Time and again, he has demonstrated his people skills, his ability to deliver results and to deliver them with precision, his deep knowledge of our businesses across the world and his superb strategic and financial acumen."
Camilleri is believed to have beaten out Michael E. Szymanczyk, the head of the U.S. tobacco business. Analysts said the Camilleri's diverse experience in guiding both the food and tobacco businesses appeared to give him the edge.
Camilleri joined Philip Morris Europe in 1978 and held several positions while building the company's tobacco business there. He was a senior vice president as well as CEO of Kraft Foods International before becoming Philip Morris CFO in 1996, where he devised financial aspects of the company's landmark tobacco litigation settlement with the states in 1997.
"Camilleri was certainly the strongest candidate," said Martin Feldman, tobacco analyst at Salomon Smith Barney in New York.
In a conference call Wednesday, Camilleri praised the company's strong management team and said he planned to announce any changes by April 25. Feldman predicted that Szymanczyk may be promoted to a position such as chief operating officer to help keep him at the company.
Camilleri takes over at a time when analysts say the company may need to reshape its organization and consider acquisitions to build profitability. The world's biggest commercial tobacco company also faces greater restrictions worldwide on cigarette marketing and is now pushing FDA regulation of tobacco as it looks to devise a potentially less hazardous cigarette.
"I am very optimistic that we can build on (Bible's) vision and guide this company to ever greater heights in terms of performance, social responsibility and shareholder value," Camilleri said.
On Wednesday, the company said it earned nearly $2.2 billion, or 99 cents per share, in the three months ended Dec. 31, compared with $2.0 billion, or 90 cents a share, a year ago.
The results matched expectations by Wall Street analysts surveyed by Thomson Financial/First Call.
Revenue was $22 billion, up from $19.4 billion a year earlier.
Domestic tobacco profits rose 6.7 percent, primarily from higher pricing. It came despite a 4 percent decline in cigarette shipments that the company attributed to wholesalers substantially reducing inventory in advance of the federal excise tax increase on Jan. 1.
The company said its retail share of the U.S. cigarette market rose 0.3 points to 50.6 percent of the market, and its top-selling Marlboro brand captured 38.1 percent of the market, up 1.1 share points.
International tobacco earnings rose 2.8 percent as shipment volume climbed 3.2 percent. Philip Morris cited strong growth in countries such as Belgium, France, Israel, Japan and Russia.
Investor response was light. In trading Wednesday on the New York Stock Exchange, shares fell 22 cents to close at $49.57.
For the year, Philip Morris earned $8.56 billion, or $3.87 a share, up from $8.51 billion, or $3.75 a share, a year ago. Revenue rose to $89.9 billion from $80.4 billion in 2000.