Altria Q1 Profit Rises 15%, cost cuts

Altria Group Inc.'sfirst-quarter earnings rose 15% as profits climbed at its cigarette and smokeless-tobacco segments, though cigarette volume continued to decline.

Marlboro cigarettes

The parent company of the country's biggest cigarette maker Philip Morris USA said its first-quarter net income increased 15.3 percent to $937 million from last year's $813 million and earnings per share increased 15.4 percent to $0.45.

Analysts polled by Thomson Reuters expected earnings of 44 cents on $3.89 billion in revenue.

The Richmond-based company attributed the increase to higher operating companies income from cigarettes, smokeless products and wine and also earnings from its equity investment in SABMiller plc. These factors were partially offset by lower income from cigars.

Chairman and Chief Executive Michael E. Szymanczyk said the results were solid as the company "navigated through high unemployment, low consumer confidence and a competitive business environment."

Altria, the maker of Marlboro and other cigarettes, has posted improved results recently despite the declines in cigarette volume, which slid 6.4% in the first quarter. Declines in cigarette volume have been offset by increasing demand for the company's smokeless-tobacco products.

Revenue from cigarettes fell 1.9% as profit increased 9.5%. Smokeless revenue fell 0.5%, while profit rose 8.4%.

The company said Marlboro volume fell 5.7%, while other premium-cigarette volume slipped 8.7% and discount-cigarette volume dropped 13.5%.

Its Black & Mild cigars saw volumes increase nearly 2 percent during the period, and its revenue excluding excise taxes fell about 24 percent to $66 million because it spent more money promoting the brand.

The company's performance also was boosted by cost savings.

Altria has been reining in expenses as tax increases, smoking bans, health concerns and social stigma make the cigarette business tougher. Altria said it cut costs about $35 million in the first quarter and expects to save about $110 million more by the end of 2011.

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