STOCKHOLM May 4 (Reuters) - Tobacco products firm Swedish Match said on Wednesday it would increase marketing of its wet snuff "snus" in the United States throughout the year as it awaits a ruling whether it may market snus in the country as less risky than cigarettes.
The firm reported forecast-beating first-quarter profits as its snus and snuff margin beat expectations helped primarily by lower costs for a snus push in the United States where it hopes for strong future growth amid slim growth prospects in Europe.
It has seen margins at the snus and snuff unit - its main cash cow - shrink in recent years due to increased cut-price competition in main market Sweden and the U.S. snus launch push.
Helped by a lower gross loss for snus outside Scandinavia, the unit's operating margin grew more than expected to 41.8 percent from 38.2 percent in the year-ago quarter, against a forecast in a Reuters poll of 38.7 percent.
Its shares rose on the news, up 7.0 percent at 0922 GMT.
The company however cautioned that losses for snus outside Scandinavia was "lower in the first quarter of 2016 than its expected run-rate for the remainder of the year".
Chief Executive Lars Dahlgren told Reuters the main reason for that was plans for increased investments in the marketing of snus in the United States.
Quarterly group operating profit before larger items affecting comparability and share of profit in Scandinavian Tobacco Group, which was listed in the quarter, grew to 939 million crowns ($117 million) from a year-earlier 866 million. Analysts' mean forecast was 894 million.
Dahlgren said the company had received no further queries in the quarter from the U.S Food and Drug Administration related to its application to market snus as less harmful than cigarettes, and had no indication on when to expect the ruling.
An advisory panel a year ago voted "no". It was the first time the panel had been asked to consider allowing a tobacco product to carry a reduced harm claim.
($1 = 8.0437 Swedish crowns) (Reporting by Anna Ringstrom; editing by Sven Nordenstam)