The tobacco industry has been portraying itself in Washington as under siege and in danger of bankruptcy. The mood at Philip Morris - the first of the major cigarette companies to hold its annual meeting this year - was defiant.

Philip Morris reported 12.6 percent growth in its 1997 net earnings, driven in part by sales of 500 billion cigarettes abroad, a 7.4 percent increase from 1996. Its stock has soared: $100 in stock purchased in 1988 would be worth $558 today.