Swedish Match, whose main markets are Sweden, Norway and the United States, also said it still expects increased sales and profits this year for its U.S. mass market cigar business, which has grown rapidly in recent quarters.
Operating profit at the firm, which some analysts see as a potential acquisition target, rose to 793 million crowns ($131 million) from a year-earlier 755 million, short of the average forecast of 803 million given in a Reuters poll of analysts.
However, the profit margin for snus and snuff, which account for more than half of group profits, was 44 percent, topping an average forecast of 43.5 percent.
At 0723 GMT the shares were up 0.1 percent at 210.20 crowns.
"The critically important snuff margin was better than expected but the cigar joint venture STM was a bit worse than expected," said UBS analyst David Hallden.
"In all, the company's important motor, the snuff margin, is enough for me to repeat my 'buy' recommendation and target price of 245 crowns," he said.
In October last year Swedish Match bought 49 percent of Scandinavian Tobacco Group (STG) and transferred all its cigar and pipe tobacco businesses except its U.S. mass market cigars to the new entity.
The first-quarter result includes the performance of businesses transferred under the deal. The share of net profit from STG amounted to 65 million crowns, short of the 68 million expected in market forecasts, and included restructuring charges of 5 million, Swedish Match said.
"With regard to our new partnership with Scandinavian Tobacco Group, the integration has progressed well, and the company grew sales as well as operating profit in the quarter," Chief Executive Lars Dahlgren said. ($1=6.067 Swedish crowns)