01—Abstract
Summary
Summary of the 10-Q filed April 26, 2012. Cited figures are marked; the original filing is the authoritative source.
Altria Group, Inc. reported net earnings attributable to Altria Group, Inc. of $973 milliona for the first quarter of 2012, an increase from $937 million in the same period of 2011.
Diluted earnings per share (EPS) rose to $0.48b from $0.45 year-over-year, driven by higher operating income and fewer shares outstanding due to ongoing share repurchases. Net revenues remained stable at $5.6 billion. The company benefited from cost reduction initiatives and positive pricing actions across its segments, particularly in smokeable and financial services.
Despite a slight decline in cigarette shipment volumes, the company saw positive retail share growth in its Marlboro brand and increased share in the smokeless products segment with Copenhagen. The company also reaffirmed its full-year 2012 diluted EPS forecast of $2.14 to $2.20c, indicating confidence in its ongoing operational performance and strategic initiatives. However, investors should remain mindful of ongoing litigation, regulatory scrutiny, and excise tax pressures inherent in the tobacco industry.
02—Key points
Key Highlights
- Net earnings attributable to Altria Group, Inc. increased to $973 million in Q1 2012 from $937 million in Q1 2011.
- Diluted EPS rose to $0.48 from $0.45 year-over-year, driven by improved operations and share repurchases.
- Net revenues remained stable at $5.6 billion, with growth in financial services and wine segments offset by a slight decrease in smokeable products.
- Smokeable products segment saw operating companies income increase by $70 million, benefiting from higher net pricing and cost savings.
- Smokeless products segment's operating companies income was stable, with strong retail share gains for Copenhagen offset by volume declines and cost reduction program impacts.
- Altria reaffirmed its full-year 2012 diluted EPS guidance of $2.14 to $2.20, representing 6%-9% growth over the prior year's adjusted diluted EPS.
- The company repurchased approximately 10.96 million shares of common stock during the first quarter of 2012.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2012, Altria Group, Inc. kept $0.21.
- Revenue$5.65B100.0%
- Cost of revenue−$3.44B61.0%
- Gross profit$2.20B39.0%
- Operating costs−$560.0M9.9%
- Operating income$1.64B29.1%
- Interest, other & tax−$447.0M7.9%
- Net income$1.20B21.2%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2012filed April 26, 2012Financial Statements
Q1 FY2012 against Q1 FY2011
| Line item | Q1 FY2012Q1 FY2011 | Change |
|---|---|---|
| Revenue | $5.65B$5.64B | +0.1% |
| Cost of Revenue | $1.79B$1.79B | −0.2% |
| Gross Profit | $2.20B$2.15B | +2.5% |
| Operating Income | $1.64B$1.54B | +6.7% |
| Net Income | $1.20B$938.00M | +27.4% |
| EPS (Basic) | $0.59$0.45 | +31.1% |
| EPS (Diluted) | $0.59$0.45 | +31.1% |
| Shares Outstanding (Basic) | 2.03B2.08B | −2.4% |
05—Questions
Frequently Asked Questions
What was Altria's revenue performance in the first quarter of 2012?
Altria's net revenues were $5.6 billion, essentially unchanged compared to the same period in 2011. This stability was driven by higher net revenues in the financial services and wine segments, which offset a slight decrease in net revenues from the smokeable products segment.
How did Altria's earnings per share (EPS) perform in Q1 2012?
Altria reported diluted EPS of $0.48 for the first quarter of 2012, an increase from $0.45 in the first quarter of 2011. This improvement was attributed to higher operating income and the positive impact of share repurchases, which reduced the number of outstanding shares.
What are the key drivers of the increase in operating income?
The increase in operating income was primarily driven by higher operating results in the smokeable products and financial services segments. This was supported by effective cost management, higher net pricing (including promotional investments), and cost reduction initiatives.
What is Altria's outlook for the full year 2012?
Altria reaffirmed its full-year 2012 reported diluted EPS forecast to be in the range of $2.14 to $2.20. This forecast anticipates adjusted diluted EPS growth of 6% to 9% over 2011 full-year adjusted diluted EPS.
06—Continue