Altria income drops 18.3 percent

Altria income drops 18.3 percent

	Published : Wed, 18 Jul 2007 13:17 By : Agencies Print this Story

NEW YORK (AP) - Altria Group Inc., owner of the Philip Morris cigarette companies, said Wednesday that second-quarter income fell more than 18 percent but also reported a rise in profit from continuing operations and revenue.

The company lowered its full-year earnings guidance, citing higher than expected asset impairment and exit costs. The company announced in June that it was closing a North Carolina plant as part of an effort to separate its domestic and international cigarette manufacturing operations. The measure could position Altria for a break-up anticipated by industry analysts.

Net income for the second quarter dropped 18.3 percent to $2.22 billion, or $1.05 a share, from $2.71 billion, or $1.29 per share, in the same period last year.

Excluding one-time costs, Altria said earnings per share were up 5 percent to $1.05. Analysts polled by Thomson Financial expected earnings per share of $1.13 per share for the quarter. Those estimates usually do not take into account one-time charges.

Revenue for the quarter grew to $18.8 billion, up 9.7 percent from $17.15 billion a year ago.

Chief Executive Louis C. Camilleri said in a statement that the company had a solid quarter.

New York-based Altria completed a spin-off of its majority stake in Kraft Foods Inc. in March, and in April, the company indicated its Lausanne, Switzerland-based Philip Morris International unit was operationally ready to be split from its U.S. division. Analysts have speculated an announcement could come as soon as next month.

Richmond, Va.-based Philip Morris USA is the biggest cigarette maker in the nation and holds nearly half of the total market, selling the Marlboro, Virginia Slims, Parliament and Basic brands. Philip Morris International operates in more than 160 countries around the world.

Citing asset impairment and exit costs, Altria lowered its full-year earnings per share guidance to a range of $4.05 to $4.10 from its April estimate of a range of $4.20 to $4.25.

The closure of the plant in Concord, N.C., resulted in $318 million in costs during the quarter, mostly from severance payments to some of the plant's 2,500 employees.

The company's production center in Richmond, Va., will become its sole American manufacturing plant by 2011, and production of about 57 billion cigarettes for Philip Morris International was expected to be shifted to Europe by the third quarter of next year.