Altria Group Inc parent of the Philip Morris tobacco companies, posted quarterly profit that beat Wall Street estimates, helped by higher prices in the United States and the weaker dollar. The company also raised its forecast for full-year earnings, citing a lower tax rate, the boost from the weak dollar and improved results at its Philip Morris International business.
Excluding favourable tax items and charges from asset impairment, earnings from continuing operations were $1.21 a share, up from $1.07 a year earlier. Analysts on average forecast $1.14 a share, according to Reuters Estimates. Net income fell to $2.63 billion, or $1.24 a share, from $2.88 billion, or $1.36 a share, a year earlier, due to the spin-off of Kraft Foods Inc.
Altria is in the midst of an overhaul that includes the spin-off of Kraft earlier this year and of Philip Morris International at a time to be announced in January. Revenue rose 8.9 percent to $19.21 billion.
Excluding excise taxes, revenue rose 5.9 percent to $9.96 billion, the company said. Analysts on average forecast $10.07 billion, according to Reuters Estimates. Profit at Philip Morris USA rose 2 percent to $1.3 billion and revenue excluding excise taxes rose 3.2 percent, even as shipments fell 1 percent to 47.1 billion cigarettes, the maker of Marlboro cigarettes, said.
The volume decline for Philip Morris was less than the company's estimated 3 percent to 4 percent decrease for the entire tobacco industry and market share rose to 50.6 percent in the quarter from 50.4 percent a year earlier. Altria has raised prices to consumers by cutting back on wholesale promotional allowances.
Profit at Philip Morris International rose 18.8 percent to $2.5 billion and shipments rose 0.6 percent to 217.2 billion cigarettes. The acquisition of a majority stake in Lakson Tobacco in Pakistan and higher volume in several other countries helped offset falling volume in the Czech Republic, Germany and Poland, the company said. Currency fluctuations added $138 million to profits in the unit, the company said.
Altria expects full-year earnings from continuing operations to be $4.20 to $4.25 a share, compared with its previous forecast of $4.05 to $4.10 a share. Analysts on average forecast $4.28 a share, according to Reuters Estimates.
Altria shares traded $71.15 in premarket electronic trading on Wednesday, up from Tuesday's New York Stock Exchange close of $70.74. The stock traded at about 15.3 times estimated 2008 earnings on Tuesday, compared with a multiple of 12.7 for rival Reynolds American Inc.