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Last Updated: Jan 31st, 2007 - 10:58:43 |
Sales abroad lift profit at Altria Group
Feb 1, 2006, 15:53
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GREENSBORO, North Carolina - Altria Group, the world's largest cigarette maker, said Tuesday that fourth-quarter profit rose 18 percent as the company raised prices on its Marlboro brand and sold more cigarettes outside the United States.Net income climbed to $2.29 billion, from $1.95 billion a year earlier. Revenue rose 9.4 percent to $24.5 billion, Altria said. The company, which is the parent of Philip Morris and Kraft Foods, said 2006 might be hurt by restructuring costs at Kraft and price cuts in Spain. International tobacco sales rose 13 percent, to $10.3 billion, driven by acquisitions in Indonesia and Colombia. The company, which is based in New York, also raised cigarette prices in the United States after Altria increased its market share to 50 percent and lured smokers away from the No. 2 company, Reynolds American. But shares of Altria fell $1.57 to close at $72.34 in New York. Analysts said that was a result of price cuts on Marlboro in Spain and an announcement Monday by Kraft that it would cut an additional 8,000 jobs. "Investors are unable to get a clear view on 2006 because there's so much noise in the numbers," said Thomas Russo at Gardner Russo & Gardner in Lancaster, Pennsylvania. "There's the competitive environment in Spain, there's the impact from Kraft activities and there were currency swings. It doesn't in any way impact the progress made on the domestic product." International tobacco shipments rose 6.6 percent to 184.2 billion cigarettes after gains in Turkey, Ukraine, Indonesia and Colombia offset lower volume in Germany, Italy and Poland. Acquisitions added $121 million to the unit's profit of $1.5 billion."We anticipate tough sledding at Philip Morris International with weak underlying volume growth," Christopher Growe, an analyst for A.G. Edwards & Son in St. Louis, Missouri, wrote Tuesday. But he rated Altria "buy," saying that Philip Morris USA "will be the shining star in 2006, courtesy of its price increase and only modest volume decline." Philip Morris USA is increasing its market share in a declining market. The number of U.S. adult smokers declined by 400,000 in 2003, to an estimated 45.4 million, the U.S. Centers for Disease Control and Prevention said in a report last May.In the United States, tobacco profit rose 0.4 percent to $1.1 billion, helped by a reduction in discounts to distributors. Shipments fell 3.4 percent to 45.5 billion cigarettes, reflecting an extra shipping day a year earlier. Marlboro was the only one of Philip Morris USA's top four brands to gain market share last quarter. The top-selling cigarette added 0.4 percentage point to 40.1 percent of U.S. smokers. In the United States, Marlboro accounts for four in 10 cigarettes sold, eclipsing the next 10 brands combined, according to Philip Morris USA, which is based in Richmond, Virginia. Philip Morris International cut the price of Marlboro cigarettes in Spain by 15 percent last week after the government raised tobacco taxes. Spain joined other West European countries like Germany, where higher taxes have reduced sales.Philip Morris said shipments fell 2.7 percent in the European Union last quarter. GREENSBORO, North Carolina Altria Group, the world's largest cigarette maker, said Tuesday that fourth-quarter profit rose 18 percent as the company raised prices on its Marlboro brand and sold more cigarettes outside the United States. Net income climbed to $2.29 billion, from $1.95 billion a year earlier. Revenue rose 9.4 percent to $24.5 billion, Altria said. The company, which is the parent of Philip Morris and Kraft Foods, said 2006 might be hurt by restructuring costs at Kraft and price cuts in Spain. International tobacco sales rose 13 percent, to $10.3 billion, driven by acquisitions in Indonesia and Colombia. The company, which is based in New York, also raised cigarette prices in the United States after Altria increased its market share to 50 percent and lured smokers away from the No. 2 company, Reynolds American. But shares of Altria fell $1.57 to close at $72.34 in New York. Analysts said that was a result of price cuts on Marlboro in Spain and an announcement Monday by Kraft that it would cut an additional 8,000 jobs. "Investors are unable to get a clear view on 2006 because there's so much noise in the numbers," said Thomas Russo at Gardner Russo & Gardner in Lancaster, Pennsylvania. "There's the competitive environment in Spain, there's the impact from Kraft activities and there were currency swings. It doesn't in any way impact the progress made on the domestic product."International tobacco shipments rose 6.6 percent to 184.2 billion cigarettes after gains in Turkey, Ukraine, Indonesia and Colombia offset lower volume in Germany, Italy and Poland. Acquisitions added $121 million to the unit's profit of $1.5 billion."We anticipate tough sledding at Philip Morris International with weak underlying volume growth," Christopher Growe, an analyst for A.G. Edwards & Son in St. Louis, Missouri, wrote Tuesday. But he rated Altria "buy," saying that Philip Morris USA "will be the shining star in 2006, courtesy of its price increase and only modest volume decline." Philip Morris USA is increasing its market share in a declining market. The number of U.S. adult smokers declined by 400,000 in 2003, to an estimated 45.4 million, the U.S. Centers for Disease Control and Prevention said in a report last May.In the United States, tobacco profit rose 0.4 percent to $1.1 billion, helped by a reduction in discounts to distributors. Shipments fell 3.4 percent to 45.5 billion cigarettes, reflecting an extra shipping day a year earlier. Marlboro was the only one of Philip Morris USA's top four brands to gain market share last quarter. The top-selling cigarette added 0.4 percentage point to 40.1 percent of U.S. smokers. In the United States, Marlboro accounts for four in 10 cigarettes sold, eclipsing the next 10 brands combined, according to Philip Morris USA, which is based in Richmond, Virginia. Philip Morris International cut the price of Marlboro cigarettes in Spain by 15 percent last week after the government raised tobacco taxes. Spain joined other West European countries like Germany, where higher taxes have reduced sales.Philip Morris said shipments fell 2.7 percent in the European Union last quarter.
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