Philip Morris Restates Profit to Include Charge

Philip Morris Cos. restated its second-quarter net income to include a $63-million charge that covers an increase in the tobacco industry’s settlement of Texas’ lawsuit seeking to recover the costs of treating ill smokers. The maker of Marlboro cigarettes, Miller beer and Kraft cheese said the charge reduced net income to $1.74 billion, or 71 cents a diluted share. The tobacco industry agreed in January to settle Texas’ lawsuit for $15.3 billion over 25 years. The payments jumped an additional $2.28 billion to reflect better terms won by Minnesota in its settlement in May. Texas, like the three other states that have settled Medicaid suits, negotiated a clause that promised it would get the same terms won by states in subsequent agreements. The charge for the Texas payments is $103 million before taxes. Other tobacco companies have done the same. Shares of New York-based Philip Morris rose 81 cents to close at $42.25 on the NYSE.