Altria's Earnings Jump 18% On Improvement in Sales
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NEW YORK -- Altria Group Inc. posted an 18% rise in fourth-quarter earnings, as the company benefited from improved sales.
Altria said Wednesday net income jumped to $2.09 billion, or $1.02 a share, compared with $1.77 billion, or 85 cents a share, in the year-earlier period. Revenue rose 10% to $20.69 billion from $18.77 billion a year earlier.
The parent of the world's largest cigarette business and majority owner of Kraft Foods Inc. had posted profit declines in the previous four quarters amid a prolonged, gradual decline in smoking in the U.S. and tough competition from cheaper rivals.
Kraft, which makes Maxwell House coffee and Nabisco cookies and crackers, announced Tuesday that it would eliminate 6% of its work force and close 20 plants world-wide over the next three years (see related article).
"Although 2003 was a challenging year, the investments we have made in our businesses are gradually beginning to pay off and we produced solid results," said Louis C. Camilleri, Altria's chairman and chief executive officer, in a prepared statement Wednesday. He also acknowledged that the year-earlier quarter had been unusually weak.
The company said it expects full-year 2004 earnings of between $4.57 and $4.67 a share, including an anticipated charge of 23 cents a share related to the Kraft restructuring and other items.
For the full year, Altria said it had earnings of $9.2 billion, or $4.52 a share, a decline of 17% from the $11.1 billion, or $5.21 a share, posted a year earlier. Revenue rose 1.8% to $81.83 billion from $80.41 billion. The result was in line with Altria's October forecast for 2003 full-year profit of $4.50 to $4.60 a share.
At the company's domestic tobacco business, Philip Morris USA, shipment volume for the fourth quarter rose 6.2% to 46.3 billion units. The Marlboro brand saw its market share rise to 38.5% from 37.4% a year earlier, while Parliament edged up and Virginia Slims inched lower.
Investors have been fretting over the outcome of a major lawsuit against Philip Morris USA. The unit has warned of bankruptcy proceedings after it was ordered to post a $12 billion bond during its appeal of a $10.1 billion judgment against it last year in a class action that alleged Philip Morris misled smokers about the dangers of light cigarettes. The company didn't comment on the case in its quarterly report.
In August, Altria raised its quarterly dividend by 6.3% to 68 cents a share, hoping to reassure shareholders in light of legal and business troubles at Philip Morris USA. Funding the higher dividend will cost Altria an additional $325 million over the next year. But Kraft Foods also raised its quarterly dividend 20% to 18 cents last year. |
