Philip Morris International Inc. PM reported adjusted first-quarter 2016 earnings per share of 98 cents, missing the Zacks Consensus Estimate of $1.11 by 11.7%. Earnings also slipped 15.5% from the prior-year quarter figure due to soft sales.Meanwhile, excluding an unfavorable currency impact of 19 cents, earnings increased 0.9% year over year. Philip Morris International Inc. (PM) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompany Revenues & MarginsNet revenue deteriorated 8.1% (up 2.4% excluding currency) to $6.08 billion and also fell below the Zacks Consensus Estimate of $6.17 billion by 1.45%. The year-over-year downside was a result of lower sales in the tobacco category, stemming from the shift of preference away from tobacco products. Cigarette shipment volumes also fell 1.4% to 196.0 billion units mainly due to a decline in total market share.Philip Morris' gross profit declined 9.1% in the quarter from the prior-year quarter to $3.98 billion as lower cost of sales was offset by reduced revenues. Operating income slipped 13.9% year over year to $2.54 billion due to higher marketing, administration and research costs.Segment DetailsNet revenue in the European Union region dropped 4.5% from the prior-year quarter to $1.9 billion. Excluding the impact of currency, net revenue went up 3.4% predominantly reflecting favorable pricing in Germany.Market share in the region gained 0.6 percentage points (pp) to 38.7% compared to 38.1% in the year-ago quarter. Meanwhile, cigarette shipment volumes increased 12.7% to 4.02 billion units.Net revenue in the Eastern Europe, the Middle East & Africa (EMEA) region declined 10.2% year over year to $1.6 billion as the favorable pricing in Russia was offset by unfavorable volume/mix in Ukraine. Excluding the impact of currency, net revenue went up 1.2% predominantly reflecting favorable pricing in Russia and Turkey.Shipment volumes increased 0.8% to 63.1 billion units, mainly reflecting growth in Egypt and Tunisia in North Africa, as well as in Turkey and Ukraine.Asia recorded net revenue of $2.0 billion, down 8.7% (down 1.7% excluding currency) from the prior-year quarter, due to unfavorable volume/mix principally in Australia.Shipment volumes of 65.2 billion units reflected a decrease of 7%, mainly because of reduced demand in Indonesia, Pakistan and the Philippines.In Latin America and Canada, revenues declined 10.5% (up 14.7% excluding currency) to $650 million. Revenues, in terms of constant currency, increased year over year mainly due to favorable pricing in Argentina and Canada, and favorable volume/mix in Mexico.Shipment volumes of 21.7 billion units increased 2.4% year over year mainly driven by higher shipment in Mexico.Financial UpdateDuring the quarter, Philip Morris did not make any share repurchases. It, however, declared a regular quarterly dividend of $1.02, representing an annualized rate of $4.08 per common share.GuidanceFor 2016, management projects GAAP earnings in the range of $4.40 to $4.50 compared with $4.42 reported in 2015. The company expects currency impact of 45 cents per share. Excluding the currency impact and one-time restructuring charges, earnings are likely to increase approximately 10% to 12%.Philip Morris carries a Zacks Rank #2 (Buy). In order to combat macro issues, the company, along with other tobacco majors like Reynolds American Inc. RAI, British American Tobacco BTI and Altria Group Inc. MO, is focusing on the growing alternative tobacco product category.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ALTRIA GROUP (MO): Free Stock Analysis Report PHILIP MORRIS (PM): Free Stock Analysis Report REYNOLDS AMER (RAI): Free Stock Analysis Report BRITISH AM TOB (BTI): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research