Altria Revenues Rise on Cigarette Shipments, Higher Prices

Altria Group Inc. (NYSE: MO) reported third-quarter 2012 results before markets opened this morning. The maker of tobacco products posted adjusted diluted earnings per share (EPS) of $0.58 on revenues (net of excise taxes) of $4.46 billion. In the same period a year ago, the company reported EPS of $0.56 on revenues of $4.33 billion. Third-quarter results compare to the Thomson Reuters consensus estimates for EPS of $0.58 and $4.36 billion in revenues.

On a GAAP basis, the company’s EPS totaled $0.32, compared with $0.57 a year ago. The drop of nearly 44% was attributed primarily to the early extinguishment of debt.

Altria, maker of Marlboro cigarettes, also reaffirmed its full-year adjusted diluted EPS guidance of $2.19 to $2.21. The consensus estimate had called for EPS of $2.21. On a GAAP basis, the EPS forecast is unchanged at $2.03 to $2.07.

The company recently raised its dividend by 7.3% to a quarterly payout of $0.44 a share, producing a dividend yield of 5.4%. Altria said it expects to continue to pay dividends of approximately 80% of its adjusted diluted EPS. The company also repurchased 7.7 million shares of stock in the third quarter, at a total cost of about $262 million, and earlier this week raised its stock buyback program from $1 billion to $1.5 billion, leaving the firm with about $550 million to repurchase more shares.

Altria’s shares are up 1.3% in premarket trading, at $32.55, in a 52-week range of $26.80 to $36.29. The consensus target price for the shares was around $36.40 before today’s report.

Paul Ausick