Altria Group Inc. (NYSE: MO) is scheduled to release its fourth-quarter financial results before the opening bell on Thursday, January 28, 2009. Analysts, on average, currently expect the company to report earnings of 40 cents a share on revenue of $4.14 billion. In the year ago quarter, the company reported earnings of 37 cents per share on revenue of $3.83 billion.
Altria Group, Inc., through its subsidiaries, engages in the manufacture and sale of cigarettes and other tobacco products in the United States and internationally. The company also manufactures machine-made large cigars and pipe tobacco; and maintains a portfolio of leveraged and direct finance leases principally in transportation, including aircraft, as well as power generation and manufacturing equipment and facilities. Altria is also the largest shareholder in UK-listed brewer, SABMiller plc with a 27.37% stake.
The demand for company's cigarettes has been impacted by decreasing social acceptability of smoking, increased regulation, public awareness of smoking's health risks, and rising costs due to excise taxes and litigation expenses.However, the company has been able to grow its profits despite negative press. In October, The Richmond, Virginia-based company said that third-quarter net income rose 1.7% to $882 million from $867 million in the year-ago quarter. However, per share earnings were $0.42, flat with last year. On an adjusted basis, earnings from continuing operations increased to $998 million or $0.48 per share from $951 million or $0.46 per share in the same quarter of last year. Quarterly net revenues totaled $6.30 billion, up 20.3% from the previous year's $5.24 billion. Analysts, on average, expected the company to report earnings of $0.47 per share on revenue of $4.66 billion.
Altria has benefited from its focus on agressive cost reduction programs. In the third quarter of 2009 $76 million in cost savings were achieved across the Altria family of companies. The company expects to achieve approximately $619 million in additional cost savings by 2011.
Philip Morris USA shipped 37.5 billion cigarettes domestically in the quarter, down 16.4% from the prior-year period, although it pegs the decrease at 12% when it is adjusted for changes in trade inventories largely brought on by a massive hike in federal excise taxes. Smokeless tobacco volumes declined 4.5% and cigar volumes rose almost 4%.
The company's flagship brand Marlboro's retail share for the quarter edged up 0.1 share point to 41.9% from last year's 41.8%.
For fiscal 2009, the company anticipates earnings from continuing operations in the range of $1.53 per share to $1.56 per share. Adjusted earnings from continuing operations is projected to range between $1.74 and $1.77 per share.
The company's stock currently trades at a forward P/E (fye 31-Dec-10) of 10.67 and PEG ratio (5 yr expected) of 1.41. The company offers an outstanding 6.8% dividend yield. In terms of stock performance, Altria shares have gained 20 percent over the past year.
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