Altria Posts Strong Q4; Expects Challenging Year
RICHMOND, Va. -- Altria reported a 27 percent rise in profits for the fourth quarter of 2010 primarily due to higher operating companies income from cigarettes and smokeless products, according to the company. However, the company does expect 2011 to be another challenging year.
According to Marketwatch, the company’s revenue fell 1.4 percent to $5.93 billion as cigarette shipments dropped 7 percent to 33.6 billion smokes. However, smokeless-product volume rose 2.5 percent. Also, Altria’s flagship brand, Marlboro, increased its domestic market share to 42.3 percent from 41.7 percent.
"Altria successfully navigated a challenging economic environment in 2010 and delivered strong results to our shareholders," said Michael E. Szymanczyk, chairman and chief executive officer for Altria, in a company release. "Altria grew its adjusted diluted earnings per share by nearly 9 percent in 2010, and increased its quarterly dividend rate by 11.8 percent, reflecting the underlying financial strength of our business. Altria’s total shareholder return in 2010 was 32.9 percent, outpacing the S&P 500’s total return of 14.8 percent for the 11th straight year."
Looking forward, the company said in its earnings release "the business environment for this year will likely remain challenging as adult consumers remain under economic pressure and face high unemployment. In the cigarettes segment, [Philip Morris USA] is continuing to see significant competitive activity and is cautious about the outlook for state excise tax increases."
As for its smokeless tobacco segment, the company said, "USSTC is just beginning to execute its plans for Skoal and, in the cigars segment, John Middleton Co. faces an especially challenging business environment."