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Japan Tobacco Declines on Domestic Cigarette Sales (Update1) 

Japan Tobacco Inc., the world's third- largest publicly traded cigarette maker, dropped the most in 10 weeks in Tokyo trading after earnings slumped at its domestic tobacco unit.

Operating income from Japan cigarette sales slid 9.4 percent to 222 billion yen ($2.12 billion) in the 12 months through March, the company said yesterday. Japan Tobacco dropped 4.1 percent to 490,000 yen at 3 p.m. on Tokyo's stock exchange, its biggest one-day decline since Feb. 20.

The maker of Camel and Mild Seven cigarettes purchased U.K.-based Gallaher Group Plc last year to increase tobacco sales in Europe and Russia as smoker numbers dwindle in its home market. The contribution of Japanese cigarette sales to total revenue fell to 52 percent from 72 percent a year earlier.

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