01—Abstract
Summary
Summary of the 10-Q filed July 29, 2010. Cited figures are marked; the original filing is the authoritative source.
Altria Group, Inc. reported a net earning of $1.856 billiona for the first six months of 2010, a significant increase from $1.600 billion in the same period of 2009.
This growth was driven by higher pricing in the cigarettes segment, increased volumes in smokeless products, and a favorable tax rate due to the resolution of tax audits. The company also raised its full-year 2010 EPS guidance, indicating a positive operational outlook. Despite an overall revenue increase, the company saw a slight decrease in net revenues for the second quarter of 2010 compared to the prior year, primarily due to lower cigarette volumes and trade inventory shifts.
The company continues to navigate regulatory complexities and litigation risks, particularly within its tobacco segments, while managing costs through various programs. Altria's investment in SABMiller also contributed positively to earnings.
02—Key points
Key Highlights
- Net earnings for the first six months of 2010 increased to $1.856 billion from $1.600 billion in the prior year.
- Diluted EPS for the six months ended June 30, 2010, was $0.89, up from $0.77 in the same period of 2009.
- Net revenues for the six months ended June 30, 2010, increased by 7.0% to $12.034 billion, driven by higher pricing in cigarettes and volume growth in smokeless products.
- Operating income increased to $2.959 billion for the six months ended June 30, 2010, up from $2.868 billion in the prior year.
- The company raised its full-year 2010 EPS guidance, reflecting strong first-half performance and net tax benefits.
- Cash provided by operating activities increased to $291 million for the first six months of 2010, compared to $135 million in the prior year.
- Altria paid $1.435 billion in dividends during the first six months of 2010, an increase from $1.324 billion in the prior year, reflecting a higher dividend rate.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2010, Altria Group, Inc. kept $0.17.
- Revenue$6.27B100.0%
- Cost of revenue−$3.90B62.2%
- Gross profit$2.37B37.8%
- Operating costs−$845.0M13.5%
- Operating income$1.53B24.4%
- Interest, other & tax−$487.0M7.8%
- Net income$1.04B16.6%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2010filed July 29, 2010Financial Statements
Q2 FY2010 against Q2 FY2009
| Line item | Q2 FY2010Q2 FY2009 | Change |
|---|---|---|
| Revenue | $6.27B$6.72B | −6.6% |
| Cost of Revenue | $1.97B$2.14B | −8.0% |
| Gross Profit | $2.37B$2.46B | −3.3% |
| Operating Income | $1.53B$1.68B | −8.8% |
| Net Income | $1.04B$1.01B | +3.2% |
| EPS (Basic) | $0.50$0.49 | +2.0% |
| EPS (Diluted) | $0.50$0.49 | +2.0% |
| Shares Outstanding (Basic) | 2.08B2K | +100581295.3% |
| Shares Outstanding (Diluted) | 2.08B2K | +100483225.3% |
05—Questions
Frequently Asked Questions
What was Altria's net earnings and EPS for the first half of 2010?
For the first six months of 2010, Altria Group, Inc. reported net earnings attributable to Altria Group, Inc. of $1.855 billion, or $0.89 per diluted share. This represents an increase from the $1.599 billion, or $0.77 per diluted share, reported for the same period in 2009.
How did the different segments perform?
The cigarettes segment saw higher net revenues due to increased pricing, while smokeless products experienced volume growth. The wine segment also reported increased net revenues and operating income, primarily driven by higher volume. The financial services segment's revenues and income decreased due to lower gains on asset sales.
What is the outlook for Altria in 2010?
Altria raised its full-year 2010 guidance for reported diluted EPS, projecting a range of $1.81 to $1.85. This upward revision reflects strong first-half business performance, higher projected earnings from operations, and net tax benefits from the reversal of tax reserves.
What is the impact of the UST acquisition on the company's financials?
The acquisition of UST, which closed in January 2009, contributed to higher volumes in the smokeless products segment. However, the company also incurred UST acquisition-related costs in the prior year, which impacted the comparability of results, though these costs were lower in the first half of 2010.
06—Continue