Altria Quarterly Profit Ticks Higher Despite Soft Demand for Cigarettes

By Jennifer Booton Markets FOXBusiness

Hurt by softer demand from adult consumers and cited uncertainties in 2011, shares of cigarette maker Altria (MO) slipped Wednesday morning, though the company’s first-quarter profit still edged up 15% from the year-earlier.

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The Richmond, Va.-based manufacturer of Marlboro, Virginia Slims, Parliament brand and Skoal tobacco products booked net income of $937 million, or 44 cents a share, compared with $813 million, or 39 cents a share, in the same quarter last year, matching the Street’s view.

Quarterly revenue was $5.6 billion, down about 2% from $5.7 billion a year ago, widely beating the Street’s view of $3.9 billion.

Sales slipped across all of Altria’s business segments except wine, which climbed 6.3% to $101 million. Cigarette revenues fell about 2% to $5 million.

“Altria delivered solid financial results in the first quarter as our businesses navigated through high unemployment, low consumer confidence and a competitive business environment,” said Michael Szymanczyk, the company’s chief executive.

The manufacturer said it achieved cost savings during the quarter of $35 million. It expects to save another $110 million by the end of this year.

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Altria said the business environment is expected to remain challenging through 2011 due to economic pressures and high unemployment.

For the full-year the company anticipates non-GAAP earnings in the range of $2.01 to $2.07 a share. Analysts are looking or earnings of $2.04 a share.

Altria warned that the trade inventory build in the first-quarter could negatively impact the cigarette segment’s future income and volume results if it is depleted.

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