RNS Number:2026V
Altria Group Inc
19 April 2007
Altria Group, Inc.
120 Park Avenue
New York, NY 10017
NEWS RELEASE
Contact: Nicholas M. Rolli
(917) 663-3460
Timothy R. Kellogg
(917) 663-2759
ALTRIA GROUP, INC. REPORTS
2007 FIRST-QUARTER RESULTS
* Reported diluted earnings per share from continuing operations of $1.01,
including the items detailed on Schedule 3, versus $1.24 in 2006, which
included a $0.30 per share tax benefit
* Adjusted for items, diluted earnings per share from continuing
operations up 5.1% to $1.03 versus $0.98 in 2006
* Altria raises forecast for 2007 full-year diluted earnings per share from
continuing operations to a range of $4.20 to $4.25, up from its previous
projection of $4.15 to $4.20
* Strong operating companies income growth of 9.5% at Philip Morris
International
NEW YORK, April 19, 2007 - Altria Group, Inc. (NYSE: MO) today announced
reported diluted earnings per share from continuing operations of $1.01 in the
first quarter of 2007, including items detailed on the attached Schedule 3,
versus $1.24 in the first quarter of 2006. The year-ago period included a $0.30
per share tax benefit from the reversal of tax reserves following the conclusion
of an IRS examination of Altria's consolidated tax returns for the years 1996
through 1999. Adjusted for that and other items, as detailed in the table
below, diluted earnings per share from continuing operations were up 5.1% to
$1.03, versus $0.98 in the year-earlier period.
"Strategically, the key event of the first quarter was the successful spin-off
of Kraft. We now are focused on growing our tobacco businesses, while
continuing to take measures to further enhance shareholder value," said Louis C.
Camilleri, chairman and chief executive officer of Altria Group, Inc.
"Philip Morris International had a strong first quarter with robust income
growth, driven by higher pricing and aided by favorable currency, but faced
challenges in certain markets, most notably Japan and Germany," Mr. Camilleri
said. "Philip Morris USA had a relatively weak quarter, but its retail share
and volume performance improved as the quarter unfolded."
Kraft Spin-Off Completed
On March 30, 2007, the 88.9% of Kraft's outstanding shares previously owned by
Altria were distributed to Altria shareholders of record on March 16, 2007 (the
"record date"). Altria shareholders received 0.692024 of a share of Kraft for
each share of Altria common stock held as of the record date. Altria
shareholders received cash in lieu of fractional shares for amounts of less than
one Kraft share. Additional details of the spin-off are available in the
Information Statement mailed to all shareholders of Altria common stock as of
the record date or at www.altria.com/kraftspinoff.
Conference Call
A conference call with members of the investment community and news media will
be Webcast at 9:00 a.m. Eastern Time on April 19, 2007. Access is available at
www.altria.com.
2007 First-Quarter Results Excluding Items
After adjusting for the items shown in the table below, diluted earnings per
share from continuing operations increased 5.1% to $1.03 for the first quarter
of 2007.
First Quarter
2007 2006 Change
Reported diluted EPS from continuing operations $1.01 $1.24 (18.5)%
Asset impairment and exit costs 0.04 --
Recoveries for airline industry exposure (0.04) --
Italian antitrust charge -- 0.03
Interest on tax reserve transfers to Kraft 0.02 0.01
Tax items -- (0.30)
Diluted EPS, excluding above items $1.03 $0.98 5.1%
Acquisitions and Divestitures
During the first quarter of 2007, Philip Morris International (PMI) acquired
control of Lakson Tobacco Company Limited, increasing its shareholding to over
97%. Lakson Tobacco is Pakistan's second-largest tobacco company, with
cigarette volume of approximately 30 billion units in the fiscal year ending
June 30, 2006. In the first quarter, PMI recorded one month of volume of 2.9
billion units and equity earnings of $2.1 million for Lakson Tobacco.
2007 Full-Year Forecast
Altria raised its forecast for reported 2007 full-year diluted earnings per
share from continuing operations to a range of $4.20 to $4.25, reflecting an
improved outlook at PMI, due partially to favorable currency. The company's
previously disclosed forecast was $4.15 to $4.20. The revised projection
reflects a higher tax rate in 2007 versus 2006, and includes charges of
approximately $0.09 per share, of which $0.06 per share were recorded in the
first quarter of 2007. The original guidance included $0.04 of cash recoveries
at PMCC and the company now estimates cash recoveries will be approximately
$0.06 per share, of which $0.04 per share were recorded in the first quarter of
2007. The projection excludes Kraft, which is accounted for as a discontinued
operation in 2007, reflecting the distribution of Kraft shares.
The factors described in the Forward-Looking and Cautionary Statements section
of this release represent continuing risks to this projection.
ALTRIA GROUP, INC.
As described in "Note 15. Segment Reporting" of Altria Group, Inc.'s 2006 Annual
Report, management reviews operating companies income, which is defined as
operating income before corporate expenses and amortization of intangibles, to
evaluate segment performance and allocate resources. Management believes it is
appropriate to disclose this measure to help investors analyze business
performance and trends. For a reconciliation of operating companies income to
operating income, see the Condensed Statements of Earnings contained in this
release.
Altria Group, Inc.'s 2007 reported results and previous-year results reflect
Kraft as a discontinued operation for the first quarter of 2007. As such, net
revenues and operating companies income for Kraft are excluded from the
company's results, while the net earnings impact is included as a single line
item. All references in this news release are to continuing operations, unless
otherwise noted. Schedules with restated results for the years 2005 and 2006
are attached.
References to international tobacco market shares are PMI estimates based on a
number of sources.
2007 First-Quarter Results
Net revenues for the first quarter of 2007 increased 8.2% to $17.6 billion,
driven by international tobacco, as well as favorable currency of $722 million,
partially offset by lower revenues from domestic tobacco and Philip Morris
Capital Corporation (PMCC).
Operating income increased 6.2% to $3.3 billion, reflecting the items described
in the attached reconciliation on Schedule 2, including higher results from
operations of $49 million, driven by increases in domestic and international
tobacco of $114 million, as well as favorable currency of $96 million and a cash
recovery of $129 million at PMCC from assets which had been previously written
down.
Earnings from continuing operations decreased 18.2% to $2.1 billion, primarily
reflecting a significantly lower effective tax rate in 2006. The company's
effective tax rate was 33.5% for the first quarter of 2007 versus 12.8% for the
year-earlier period. The 2006 first-quarter tax rate included a benefit from
the reversal of tax reserves following the conclusion of an IRS examination of
Altria's consolidated tax returns for the years 1996 through 1999.
Net earnings, including discontinued operations, decreased 20.9% to $2.8
billion, due to the factors mentioned above and lower results at Kraft for the
first quarter of 2007, primarily reflecting the tax benefit from the closure of
the IRS audit in the year-ago quarter. Diluted earnings per share, including
discontinued operations as detailed on Schedule 1, decreased 21.2% to $1.30.
DOMESTIC TOBACCO
2007 First-Quarter Results
Philip Morris USA (PM USA), Altria Group, Inc.'s domestic tobacco business,
achieved retail share gains for its premium brands Marlboro and Parliament,
offset by share losses concentrated in PM USA's non-support brands.
Operating companies income increased 1.3% to $1.1 billion, driven by lower
wholesale promotional allowance rates, decreased promotional spending and lower
general and administrative costs, largely offset by lower volume, increased
resolution expenses and higher spending on new products.
PM USA's shipment volume of 40.6 billion units was down 6.2% or 2.7 billion
units versus the previous year. PM USA estimates that overall industry weakness
accounted for about 2.0 billion units of this shipment decline. The balance was
primarily due to higher wholesaler inventory depletions of PM USA brands versus
the prior year, timing of promotions and consumer pantry purchases in advance of
the January 1, 2007 excise tax increase in Texas. Adjusting for these factors,
PM USA estimates its volume decline would have been approximately 5%.
As shown in the following table, share gains for Marlboro and Parliament of 0.4
points and 0.1 point, respectively, were offset by losses of 0.3 share points in
non-support brands and 0.1 share point each for Virginia Slims and Basic.
Philip Morris USA Quarterly Retail Share*
Q1 2007 Q1 2006 Change
Marlboro 40.8% 40.4% 0.4 pp
Parliament 1.9% 1.8% 0.1 pp
Virginia Slims 2.2% 2.3% -0.1 pp
Basic 4.1% 4.2% -0.1 pp
Focus Brands 49.0% 48.7% 0.3 pp
Other PM USA 1.4% 1.7% -0.3 pp
Total PM USA 50.4% 50.4% 0.0 pp
* Retail share performance is based on data from the
IRI/Capstone Total Retail Panel, which is a tracking service that uses a sample of
stores to project market share performance in retail stores selling cigarettes.
The panel was not designed to capture sales through other channels, including
Internet and direct mail.
Marlboro Smooth was introduced nationally in March 2007 and is meeting PM USA's
expectations. Marlboro Smooth is a new, full-flavor menthol product that
reinforces Marlboro's flavor heritage and its position as the leader in the
premium category.
Although PM USA's share was unchanged in the first quarter of 2007 versus the
prior-year period, share trends improved in March, following weaker share trends
in January and February 2007 due to lower promotional spending than the previous
year. PM USA's underlying shipment performance improved strongly in March.
PM USA estimates that total cigarette industry volume declined between 4% and 5%
during the first quarter of 2007, a rate significantly higher than the long-term
underlying trend. The accelerated rate of decline was driven by a number of
price-related factors, including reductions in manufacturers' off-invoice
allowances and increases in manufacturers' list prices related to stepped-up
resolution payments, as well as increased state excise taxes, primarily in
Texas. PM USA estimates that as the year unfolds, the industry decline will
moderate, and that for the full year, the total industry volume decline will be
about 3% to 4%.
INTERNATIONAL TOBACCO
2007 First-Quarter Results
Cigarette shipment volume for Philip Morris International (PMI), Altria Group,
Inc.'s international tobacco business, increased 1.5% to 213.3 billion units,
driven by the inclusion of all Lakson volume in Pakistan beginning in March and
solid gains in Argentina, Egypt, Indonesia, Italy, Korea, North Africa, Poland
and Ukraine. Partially offsetting the volume increase were declines in Japan
and Russia. Excluding acquisitions, PMI's cigarette shipment volume was
essentially flat. PMI's total tobacco volume, which included 1.9 billion
cigarette equivalent units of other tobacco products (OTPs), grew 1.3% to 215.2
billion units versus the same period last year.
Operating companies income increased 9.5% to $2.2 billion, due primarily to
higher pricing and favorable currency of $96 million.
PMI's market share in the first quarter of 2007 advanced in many countries,
including gains in Austria, Argentina, Australia, Egypt, Finland, France,
Greece, Hong Kong, Hungary, Indonesia, Italy, Korea, Mexico, Philippines,
Poland, Portugal, Singapore, Serbia, Sweden, Ukraine and the United Kingdom.
Total Marlboro cigarette shipments of 78.2 billion units were down 2.8%, due
mainly to inventory depletions in Japan and erosion in vending in Germany,
partially offset by higher volume in Italy, Russia, North Africa, worldwide
duty-free and the successful launch of Marlboro Filter Plus in Korea. Marlboro
market share was up in Brazil, France, Greece, Hong Kong, Hungary, Italy,
Kazakhstan, Korea, Kuwait, Philippines, Poland, Portugal, Romania, Russia,
Singapore, Saudi Arabia, Serbia, the United Kingdom and Ukraine.
In the European Union (EU) region, PMI's cigarette shipments were up 3.4% or 2.2
billion units, driven by the Czech Republic, Hungary, Italy and Poland.
Cigarette market share in the EU region rose 0.2 points to 39.5%, with strong
share performances in France, Hungary, Italy and Poland, largely offset by
declines in the Czech Republic, Germany and Spain.
In Italy, the total cigarette market was down 0.5% versus the year-ago period
and PMI's in-market sales rose 1.1%, driven by Marlboro, Chesterfield and Diana.
This fueled a 0.9 point increase in market share to 54.2%.
In Germany, total tobacco volume declined 6.8% versus the year-ago quarter, due
mainly to lower other tobacco products volume. PMI's total tobacco share at
29.1% was unchanged versus the first quarter of 2006.
The total cigarette market in Germany grew slightly, due to the growth of the
low-price segment. However, PMI's in-market sales declined 2.1% and market
share was down 0.9 points to 36.2%, largely attributable to the contraction of
industry sales through the vending channel. Total industry sales through the
vending channel declined 38% in the first quarter of 2007, due to a reduction in
the number of vending machines as a result of regulations that require
electronic age verification. Compliance with the new regulations resulted in
the elimination of many older-generation vending machines, and access to the
remaining machines has become more complex and less convenient. As a
consequence, even though PMI's total cigarette share in vending and in other
trade channels grew 0.2 share points and 0.6 share points, respectively, its
overall share declined.
In Germany, Marlboro declined 3.5 share points, partially offset by a gain of
2.6 points for L&M. Marlboro's share declined to 25.9%, reflecting consumer
down-trading to low-price brands and losses in the vending machine channel.
With a 42.1% share of the vending channel, Marlboro was disproportionately
impacted by the decline in industry sales through this channel. In Spain,
the total cigarette market was flat versus the same quarter last year. PMI's
in-market sales were down 3.3% and market share declined 1.0 point to 31.7%, due
mainly to Marlboro, which suffered from a difficult comparison to the prior-year
period. However, PMI experienced solid improvement in its profitability in
Spain during the first quarter.
In France, continued moderate price gaps and PMI's strong brand equity generated
a market share gain of 0.7 points to a record 43.3%. Share for Marlboro and the
Philip Morris brand were up 0.4 points each, to 31.3% and 6.2%, respectively.
In Poland, the total market was up and PMI's shipments grew 8.3%. Market share
advanced 2.3 points to 40.8%, mainly driven by Marlboro and L&M, partially
offset by the continuing decline of the low-price 70mm segment.
In the Eastern Europe, Middle East and Africa region, PMI's shipments were down
0.5%, driven primarily by declines in Russia and Turkey, partially offset by
gains in Algeria, Egypt and Ukraine. In Russia, shipments were down 6.6% and
share declined 0.2 points to 26.6%, due largely to L&M and local low-price
brands, partially offset by higher sales and market share of higher-margin
international brands, Marlboro, Parliament and Chesterfield. In Turkey,
shipments were down 3.5% and market share declined 2.1 points to 41.4%, due to
the February 2007 tax-driven retail price increase. In Ukraine, shipments grew
6.4% and share rose 0.5 points to 33.2%, driven by continued consumer up-trading
to premium brands, particularly Marlboro and Chesterfield. In Egypt, improved
economic conditions and increased tourism continued to fuel the growth of the
total cigarette industry and premium brands. PMI's shipments rose 28.2% and
share advanced 1.0 point to 11.4%, driven by Marlboro and L&M.
In Asia, PMI's volume rose 0.4% including all Lakson volume in Pakistan
beginning in March. Excluding the additional volume from Lakson, volume was
down 5.2%, due primarily to Japan, partially offset by gains in Indonesia and
Korea.
In Japan, the total market declined 5.7% as a result of the July 2006 tax-driven
price increase. PMI's in-market sales were down 5.8%, resulting in PMI's market
share remaining unchanged at 24.7%. PMI shipments were down 17.5% versus the
year-ago quarter, due to the effects of the 2006 price increase and an
unfavorable comparison with the prior-year quarter, which included distributor
purchases in advance of the 2006 price increase and higher inventories at
year-end 2006.
In Indonesia, PMI shipment volume rose 5.8% and market share increased 0.5
points to 28.4%, led by the continued strong performance of A Hijau. In Korea,
shipments increased 25.8%, reflecting the timing of shipments and the successful
launch of Marlboro Filter Plus in the fourth quarter of 2006. Marlboro Filter
Plus is a new one-milligram cigarette with a highly innovative cigarette and
filter construction.
In Latin America, cigarette shipments were up 0.3%, due mainly to gains in
Argentina, partially offset by the timing of shipments in Mexico. The total
market in Argentina was up 2.3%, while PMI shipments grew 9.8% and share was up
4.7 points to 68.5%, driven by the continued growth of the Philip Morris brand.
In Mexico, PMI's shipments were down 6.3%, reflecting increased trade purchases
in the fourth quarter of 2006 ahead of the 2007 tax increase. However, market
share grew 0.7 points to 62.3%, driven by the launch of Delicados Supremos in
January 2007 and the continued growth of Benson & Hedges.
FINANCIAL SERVICES
2007 First-Quarter Results
Philip Morris Capital Corporation (PMCC) reported operating companies income of
$160 million for the first quarter of 2007 versus $96 million for the
year-earlier period. First-quarter 2007 results reflected a cash recovery of
$129 million at PMCC from assets which had been previously written down,
partially offset by lower asset management gains and lower revenues, primarily
as a result of lower investment balances.
Consistent with its strategic shift in 2003, PMCC is focused on managing its
existing portfolio of finance assets in order to maximize gains and generate
cash flow from asset sales and related activities. PMCC is no longer making new
investments and expects that its operating companies income will fluctuate over
time as investments mature or are sold.
Altria Group, Inc. Profile
As of March 31, 2007, Altria Group, Inc. owned 100% of Philip Morris
International Inc., Philip Morris USA Inc. and Philip Morris Capital
Corporation, and approximately 28.6% of SABMiller plc. The brand portfolio of
Altria Group, Inc.'s tobacco operating companies includes such well-known names
as Marlboro, L&M, Parliament and Virginia Slims. Altria Group, Inc. recorded
2006 net revenues from continuing operations of $67.1 billion.
Trademarks and service marks mentioned in this release are the registered
property of, or licensed by, the subsidiaries of Altria Group, Inc.
Forward-Looking and Cautionary Statements
This press release contains projections of future results and other
forward-looking statements that involve a number of risks and uncertainties and
are made pursuant to the Safe Harbor Provisions of the Private Securities
Litigation Reform Act of 1995. The following important factors could cause
actual results and outcomes to differ materially from those contained in such
forward-looking statements.
Altria Group, Inc.'s tobacco subsidiaries (Philip Morris USA and Philip Morris
International) are subject to intense price competition; changes in consumer
preferences and demand for their products; fluctuations in levels of customer
inventories; the effects of foreign economies and local economic and market
conditions; unfavorable currency movements and changes to income tax laws.
Their results are dependent upon their continued ability to promote brand equity
successfully; to anticipate and respond to new consumer trends; to develop new
products and markets and to broaden brand portfolios in order to compete
effectively with lower-priced products; and to improve productivity.
Altria Group, Inc.'s tobacco subsidiaries continue to be subject to litigation,
including risks associated with adverse jury and judicial determinations, and
courts reaching conclusions at variance with the company's understanding of
applicable law and bonding requirements in the limited number of jurisdictions
that do not limit the dollar amount of appeal bonds; legislation, including
actual and potential excise tax increases; discriminatory excise tax structures;
increasing marketing and regulatory restrictions; the effects of price increases
related to excise tax increases and concluded tobacco litigation settlements on
consumption rates and consumer preferences within price segments; health
concerns relating to the use of tobacco products and exposure to environmental
tobacco smoke; governmental regulation; privately imposed smoking restrictions;
and governmental and grand jury investigations.
Altria Group, Inc. and its subsidiaries are subject to other risks detailed from
time to time in its publicly filed documents, including its Annual Report on
Form 10-K for the period ended December 31, 2006. Altria Group, Inc. cautions
that the foregoing list of important factors is not complete and does not
undertake to update any forward-looking statements that it may make.
# # #
This information is provided by RNS
The company news service from the London Stock Exchange
END
QRFQKLFFDZBEBBX
Altria Group (LSE:ALA)
과거 데이터 주식 차트
부터 5월(5) 2024 으로 6월(6) 2024
Altria Group (LSE:ALA)
과거 데이터 주식 차트
부터 6월(6) 2023 으로 6월(6) 2024
