HENRICO COUNTY (dpa-AFX) - Cigarette giant Altria Group Inc. (MO) is slated to release its second-quarter numbers before the bell on Wednesday, July 26. The company's second-quarter volumes are likely to reflect the increasing cigarette prices as consumers shift away from tobacco products, and the increasing worldwide anti-tobacco campaigns.
FY16 Guidance
Altria reaffirmed its guidance for 2016 full-year adjusted earnings of $3.00 - $3.05 per share, representing a growth rate of 7% - 9% from an adjusted earnings per share base of $2.80 in 2015. This range excludes the 2016 special items.
Altria continues to expect that its 2016 full-year effective tax rate on operations will be about 35.3%.
Industry View - 'Operating profit is set to grow 4%-5% for both the US and European industries during 2016, but cigarette sales volumes are also set to fall by about 4% in the US and Western Europe,' said Nancy Meadows, a Moody's Vice President - Senior Analyst. 'Moreover, the expected fall in sales volume could accelerate in the US if e-cigarette sales see stronger-than-expected growth, whereas in Europe, the pricing environment remains supportive, reflecting stable macro-economic conditions.'
The company's last quarter results illustrated the strength of the company's core tobacco businesses and its focus on execution. 'And Altria paid shareholders over $1.1 billion in dividends during the quarter.' Both the smokeable and smokeless product segments saw robust, adjusted operating companies income growth and expanded margins.
The company's first-quarternet income of $1.22 billion or $0.62 per share compared to $1.02 billion or $0.52 per share in the prior year period.
The company attributed the increase in first-quarter earnings largely to the 2015 loss on early extinguishment of debt and higher reported OCI in the smokeable and smokeless products segments, which included the restructuring charges associated with the productivity initiative. These factors were partially offset by lower earnings from Altria's equity investment in SABMiller.
On an adjusted basis earnings grew 14.3% to $0.72 per share from $0.63 per share in the same period of last year.
Net revenues increased 4.5% to $6.07 billion from the previous year's revenue of $5.80 billionr, reflecting higher net revenues in all reportable segments. Altria's revenues net of excise taxes increased 6.0% to $4.5 billion.
Marty Barrington, Altria's Chairman, Chief Executive Officer and President, said, 'The smokeable products segment continued its outstanding performance with contributions across the brand portfolio. In smokeless products, USSTC continues to execute its strategies, including the successful national expansion of its innovative Copenhagen Mint.'
Copyright RTT News/dpa-AFX