UPDATE 1-Philip Morris CR dips 13.7 pct as profit disappoints

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PRAGUE, March 23 (Reuters) - Shares in Philip Morris CR fell as much as 13.7 percent to a seven-month low at Friday's open after the Czech cigarette maker's net profit dropped well below market expectations.

Philip Morris, part of the U.S.-based Altria Group , tumbled as low as 9,000 crowns from 10,428 crowns at Thursday's close before bouncing back.

The stock was 9.4 percent lower at 9,450 crowns by 0844 GMT, versus a 0.2 percent gain in the Prague blue-chip index .

The firm's unconsolidated net profit fell to 1.65 billion crowns ($78.95 million) in 2006, below an average forecast of 2.3 billion crowns in a Reuters survey of four analysts [ID:nL22398415].

The 46 percent year-on-year drop in profit disappointed markets because the company has traditionally paid out the entire unconsolidated profit as a dividend in past years.

"If Philip Morris keeps 100 percent pay out ratio, the dividend per share will drop to 600 crowns from last year's 1,112 crowns, versus expected 810 crowns," said Petr Bartek, analyst at Ceska Sporitelna, in a morning note to investors.