Jump to full article: Reuters, 2008-05-01
Author: Elaine Lies
Intro: Japan Tobacco Inc, the world's third-largest cigarette maker, booked a 9 percent gain in quarterly operating profit on expanding sales outside its shrinking home market, but forecast a 28 percent fall this year due to an accounting change, its first drop in eight years.
Japan Tobacco last year acquired Britain's Gallaher Group for about $15 billion to vastly increase its international sales and offset declining revenues at home, where the population is shrinking and health-consciousness is spreading.
But Japan Tobacco, which makes Mild Seven cigarettes and owns the Camel, Winston and Salem brands outside the United States, said profits would sag this year as it begins to amortise goodwill related to the Gallaher acquisition.
Goodwill is the excess paid for a company above the value of its assets and includes intangible assets such as brand names.
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