Summary
Altria Group, Inc. (MO) reported its third-quarter 2011 financial results, showing a net revenue decrease of 4.1% for the nine months ended September 30, 2011, compared to the same period in 2010. This decline was primarily driven by lower net revenues in the financial services and cigarettes segments. Net earnings attributable to Altria Group, Inc. decreased by 14.5% year-over-year for the nine-month period. A significant factor impacting earnings was a one-time charge of $627 million related to the tax treatment of certain leveraged lease transactions by its subsidiary, PMCC. Despite these headwinds, the company's consumer product segments, particularly smokeless products and wine, showed growth in operating companies income, driven by premium brand performance and new product introductions. In the third quarter, net revenues decreased by 4.6%, primarily due to lower cigarette volumes. However, net earnings attributable to Altria Group, Inc. increased by 3.7% year-over-year, aided by strong performance in smokeless products, wine, and financial services, as well as higher equity earnings from SABMiller. The company also announced a new $1.0 billion share repurchase program and a cost reduction program aimed at improving efficiency. Altria reaffirmed its 2011 full-year guidance for adjusted diluted EPS, indicating confidence in underlying operational performance despite the reported charge.
Financial Highlights
50 data points| Revenue | $6.11B |
| Cost of Revenue | $1.88B |
| Gross Profit | $2.44B |
| Operating Income | $1.88B |
| Net Income | $1.17B |
| EPS (Basic) | $0.57 |
| EPS (Diluted) | $0.57 |
| Shares Outstanding (Basic) | 2.05B |
| Shares Outstanding (Diluted) | 2.05B |
Key Highlights
- 1Net revenues for the nine months ended September 30, 2011, decreased by 4.1% to $17.7 billion, primarily due to lower financial services and cigarette revenues.
- 2Net earnings attributable to Altria Group, Inc. for the nine months ended September 30, 2011, were $2.55 billion, a decrease of 14.5% from $2.99 billion in the prior year.
- 3A significant one-time charge of $627 million related to PMCC leveraged lease transactions negatively impacted earnings in the second quarter of 2011.
- 4Operating companies income from the smokeless products segment increased by 12.6% for the nine months, driven by strong performance of premium brands like Copenhagen and Skoal.
- 5The wine segment demonstrated double-digit growth in net revenues and operating companies income for the nine months, attributed to premium product focus and expanded distribution.
- 6Altria completed its $1.0 billion share repurchase program and announced a new $1.0 billion program, indicating a commitment to returning capital to shareholders.
- 7The company reaffirmed its 2011 full-year guidance for adjusted diluted EPS, projecting a 6% to 9% growth rate over 2010 adjusted diluted EPS.