Altria Profit Lifted on Anheuser-Busch InBev Stake
February 01 2017 - 8:16AM
Dow Jones News
By Anne Steele
Altria Group Inc.'s stake in beer behometh Anheuser-Busch InBev
NV proved a boon in the final quarter of the year as cigarette
volumes continued to wane and market share in the company's lead
segment remained flat.
Cigarette-shipment volume fell 4.8% amid an overall industry
decline and one fewer shipping day. Cigar volume was 5.3% higher
and total smokable products declined 4.7%.
Altria, the U.S.'s largest tobacco company, faces strong
competition from No. 2 player Reynolds American Inc. In the latest
quarter, Altria's cigarette market share remained flat from a year
ago at 51.4%, as Marlboro remained flat while a 0.1% increase in
discount brands retail share was offset by and a 0.1% decrease in
other premium cigarette sales. For cigars, Altria's market share
slipped to 26.6% from 27.4%.
But during the quarter, Altria received a share of the newly
enlarged Anheuser-Busch InBev following the Belgian brewer's
just-completed roughly $100 billion takeover of rival SABMiller
PLC.
The U.S. tobacco company received $5.3 billion in cash and a
9.6% share of AB InBev in exchange for its 27% stake in SABMiller.
Altria said it would have two seats on AB InBev's board of
directors, allowing it to continue using equity accounting
practices to report its share of the brewer's profit as
earnings.
In all for the December period, Altria's earnings rose to $10.28
billion, or $5.27 a share, from $1.25 billion, or 64 cents a share,
a year prior. Earnings were lifted largely by the AB
InBev/SABMiller transaction gain. Excluding items, per-share
earnings rose to 68 cents. Analysts polled by Thomson Reuters had
forecast earnings of 67 cents.
Net revenue after excise taxes grew 0.1% to $4.7 billion, just
short of analyst estimates for $4.8 billion.
Altria forecast 2017 adjusted earnings in a range of $3.26 to
$3.32 a share. That is just below the $3.33 a share analysts have
predicted.
Shares, inactive premarket, have risen 17% over the past 12
months.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
February 01, 2017 08:01 ET (13:01 GMT)
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