Altria Group Inc. Earnings: Increasing Costs Tighten Margins as Net Income Falls

S&P 500 (NYSE:SPY) component Altria Group Inc. (NYSE:MO) reported its results for the fourth quarter. Altria Group manufactures and sells cigarettes and tobacco products as well as maintaining a portfolio of leveraged and direct finance leases.

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Altria Group Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for Altria Group Inc. fell to $836 million (41 cents per share) vs. $919 million (44 cents per share) a year earlier. This is a decline of 9% from the year earlier quarter.

Revenue: Rose 3.4% to $6.1 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: MO reported adjusted net income of 50 cents per share. By that measure, the company beat the mean estimate of 49 cents per share. It beat the average revenue estimate of $4.23 billion.

Quoting Management: “Altria delivered strong returns for its shareholders in 2011 in a challenging business environment while taking steps to continue creating shareholder value into the future,” said Michael E. Szymanczyk, Chairman and Chief Executive Officer (NYSE:CEO) of Altria. “Altria grew its redefined adjusted diluted EPS by 7.9% behind the strength of our tobacco and wine businesses.”

Key Stats:

The company beat estimates last quarter after being in line with expectations in the third quarter with net income of 56 cents per share.

Net income has dropped 4.1% year over year on average across the last five quarters. Performance was hurt by a 57.4% decline in the second quarter from the year earlier quarter.

Looking Forward: Expectations for the first quarter of the next fiscal year have not changed from 49 cents. Over the past sixty days, the average estimate for the fiscal year has reached $2.03 abs per share, a decline from $2.04.

Competitors to Watch: Reynolds American, Inc. (NYSE:RAI), Lorillard Inc. (NYSE:LO), Philip Morris Intl. Inc. (NYSE:PM), Vector Group Ltd. (NYSE:VGR), Star Scientific, Inc. (NASDAQ:CIGX), British American Tobacco (AMEX:BTI), Alliance One Intl., Inc. (NYSE:AOI), and Universal Corporation (NYSE:UVV).

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com