November 1, 2017 / 6:07 AM / a year ago

REFILE-Japan Tobacco 9-month profit falls on weak domestic cigarette sales

(Corrects to add ‘falls’ in headline)

TOKYO, Nov 1 (Reuters) - Japan Tobacco Inc, the world’s No.4 tobacco company, on Wednesday said its nine-month operating profit fell 5 percent, hurt by a sharp decline in domestic cigarette sales as more smokers shifted to vaping products.

The company said its operating profit came in at 469.7 billion yen ($4.12 billion) for January-September period, versus 494.6 billion yen a year ago and below an average estimate of 475.5 billion yen from five analysts polled by Thomson Reuters.

Japan Tobacco, which commands more than 60 percent of the cigarette market at home, has been caught on the wrong side of a growing popularity of “heat not burn” cigarette alternatives and has lagged behind rival Philip Morris International Inc in the category in its own backyard.

Philip Morris started selling its IQOS device in Japan in 2014 and expanded nationwide in April last year, while Japan Tobacco rolled out its Ploom Tech battery-powered smokeless tobacco product in central Tokyo only in July this year after production delays.

For 2017, Japan Tobacco kept its operating profit forecast at 565 billion yen, down 4.8 percent from the previous year. This is below an average estimate of 575.9 billion yen from 20 analysts polled by Thomson Reuters. ($1 = 113.9200 yen) (Reporting by Taiga Uranaka; Editing by Himani Sarkar)

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