Altria Quarterly Profit Ticks Higher Despite Soft Demand for Cigarettes
Hurt by softer demand from adult consumers and cited uncertainties in 2011, shares of cigarette maker Altria (NYSE:MO) slipped Wednesday morning, though the company’s first-quarter profit still edged up 15% from the year-earlier.
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.
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.