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quarter as well, with revenues advancing 6.8 percent, to $4.3 billion, and with operating income climbing 19.2 percent, to $688 million. Volume was up 16.3 percent over a year ago to 128 billion units. "International is the crown jewel in Philip Morris," Ms. Temple of Salomon Brothers said. The positive earnings report may give Mr. Murray and Mr. Bible a lift the next time they meet with the company's large institutional shareholders, many of whom continue to press for a corporate firewall around the company's tobacco opera- tions. A meeting was scheduled for today, but was postponed after Philip Morris could not assure the shareholders that directors who are not part of the company's management would be able to attend. No new date has been set. Related Stories: Financial Times (07/13) P. 1; New York Times (07/13) P. D4; Investor's Business Daily (07/13) P. A7; USA Today (07/13) P. 3B; Wall Street Journal (07/13) P. B2. [see next story] "Philip Morris Reports Higher Earnings For Second Quarter, But Its Stock Falls" The Wall Street Journal (7/y3/94) P. B2; Shapiro, Eben Philip Morris Cos.' second-quarter profit rose nearly 18%, propelled by strong cigarette sales at home and abroad. But its stock fell yesterday, indicating that in the current antitobacco climate, strong earnings alone won't lift the company's depressed share price. The company also disclosed that it has been aggressively repurchasing its stock, heightening speculation on Wall Street that Philip Morris will unveil a massive new share-repurchase program next month. PM has just under $600 million left in an existing buyback program. Marc Cohen, an analyst with Goldman Sachs, calls the stepped-up stock buying "very bullish. This stock is trading at unprecedented low levels." Although Philip Morris' earnings were at the high end of analysts' expectations, the company's shares fell 75 cents to $53.125 in New York Stock Exchange composite trading after a run-up in recent weeks in anticipation of a strong quarter. Some big share- holders pointed to the stock market's negative reaction as further proof that PM should break up into separate food and tobacco businesses, a strategy the new management has ruled out for the time being. "it highlights the problem," says Bruce Gregory, a port- folio manager with Progressive Partners, a large shareholder pushing for a split-up. "The numbers are good, but the market is not willing to pay for" the stock. Gary Black, an analyst with Sanford C. Bern- stein & Co. said, "You need a catalyst. Superior earnings growth is not enough to keep the stock moving." Large, vocal shareholders are continuing to push for a meeting with Philip Morris directors to explore a breakup. A meeting with top management had been set for today, but when no nonmanagement directors were scheduled to appear, the large institutional shareholders declined to meet. Yesterday, the shareholder group threatened to vote out the board if it wouldn't meet. i

i "If these directors won't meet with us, we will need to find directors that will," said Anne Hansen, deputy director of the Council of Institutional Investors. "There is an election next spring; you can't cancel that." "U.K. Clears B.A.T.'s Acquisition of American Tobacco" Reuters (7/13/94) London--Trade and Industry Secretary Michael Heseltine has decided to clear the proposed acquisition by B.A.T. Industries PLC of the American Tobacco Company division of American Brands Inc. B.A.T said in April it planned to buy the American Brands division for around one billion dollars. The deal is due to completed in December and could add seven percentage points to B.A.T.'s 11 percent share of the U.S. tobacco market. "John J. Tucker To Retire From Senior VP Position at PM" Dow Jones and Company, Inc. (7/ti3194) The Wall Street Journal reported that John J. Tucker, senior vice president of human resources for Philip Morris, has "confirmed his intention to retire" Aug. 1, according to a Philip Morris internal memorandum issued yesterday. Mr. Tucker was the closest confidant of Mr. Miles, the former chairman, within the company, according to Philip Morris executives. Mr. Tucker couldn't be reached for comment. The memo said Mr. Tucker's retirement will allow his family to return to the Midwest in time for his daughter to enroll in high school there. "Universal Corp. Plans Restructuring" Richmond Times-Dispatch (07/12194) P. C11; Ress, David Richmond-based Universal Corp. announced late yesterday a major restructuring and that the corporation's earnings would fall by more than a third from last year's level. Universal's earnings for the fiscal year fell 35 percent to 40 percent from the previous year's level. The Fortune 500 company said that its estimate for this year's drop excludes the estimated $13 million-to-$18 million pretax cost of its restructuring, which involves the "consolidation ... of operations and services in company facilities around the world." The oversupply of tobacco was one of several reasons behind the restructuring, according to Karen Whelan, Universal's vice president and treasurer. The savings to the company through restructuring represent 5 percent to 7 percent of most of Universal's expenses for last year. About 55 percent of Universal's revenue comes from its U.S. tobacco and seed businesses. I