Altria boosts profit on lower expenses
- January 27, 2011
Altria Group Inc. reported a 26.7 percent increase in profit in the fourth quarter as it posted lower expenses.
The company sold fewer cigarettes, but improved its margins in most categories and increased sales of its smokeless tobacco products.
Altria also said it saved $65 million in the fourth quarter and $317 million in 2010 through cost reductions in corporate expenses and manufacturing improvements.
Revenues in the quarter fell 1.4 percent to $5.9 billion. The company’s cigarette volume fell 7 percent in the fourth quarter, but lower manufacturing costs and higher prices boosted its operating income 7.4 percent. The smokeless tobacco segment revenues increased 14.3 percent on higher pricing and sales.
For the full year, Altria’s revenues grew 3.4 percent to $24.4 billion, compared with $23.6 billion in 2009. Earnings for the year grew 21.8 percent to $3.9 billion, compared with $3.2 billion the previous year.
Altria said 2011 will remain challenging as consumer faced high unemployment and economic pressure. The company says its cigarette and cigar segments will face increased competition and earnings could be affected by state excise taxes. It is predicting a 6 percent to 9 percent growth in earnings, ranging from $2.01 to $2.07 per share.
Altria said the first half of 2011 will be more challenging because of new product launches and continued economic and tax uncertainties.