Summary
Altria Group, Inc. reported solid results for the nine months ended September 30, 2008, driven by its core tobacco business, particularly cigarettes and other tobacco products. Net revenues, excluding excise taxes, increased by 5.3% year-over-year, reflecting improved pricing and the acquisition of John Middleton Co. (Middleton). Operating companies income saw a significant increase of 15.3% due to a combination of factors, including a gain on the sale of its corporate headquarters, lower corporate expenses, and improved cigarette segment performance, partially offset by costs associated with manufacturing optimization and a debt extinguishment charge. The company also provided an updated outlook, reaffirming its full-year diluted EPS guidance from continuing operations. Altria is actively managing its capital structure, including a modified share repurchase program and financing for its pending acquisition of UST Inc. The financial services segment, PMCC, experienced a decrease in operating income due to an increased allowance for losses amid challenging financial market conditions, but overall liquidity is considered adequate.
Financial Highlights
25 data pointsKey Highlights
- 1Net revenues (excluding excise taxes) grew 5.3% year-over-year for the nine months ended September 30, 2008, driven by pricing actions and the Middleton acquisition.
- 2Operating income increased by 15.3% for the same period, boosted by a gain on the sale of the corporate headquarters, cost reductions, and improved tobacco segment performance.
- 3Diluted EPS from continuing operations for the nine months increased to $1.15 from $1.09 in the prior year, reflecting operational improvements and lower share count.
- 4Altria completed the spin-off of Philip Morris International (PMI) in March 2008, significantly impacting reported net earnings and equity due to the deconsolidation of PMI's results.
- 5The company announced a definitive agreement to acquire UST Inc. for approximately $11.7 billion, subject to shareholder approval and closing conditions, expected in early 2009.
- 6Shareholders received $1.28 per share in dividends annualized, with a quarterly rate of $0.32 per common share, reflecting a 10.3% increase during the third quarter.
- 7The company repurchased approximately $1.2 billion of its common stock year-to-date as part of a modified $4.0 billion repurchase program.