Altria - q3 2009 earnings results..

October 21, 2009 - Altria profit higher but volume plummets. Reported results reflect higher operating companies income (OCI) from financial services and cigars, as well as the OCI contribution from the UST LLC (UST) acquisition, lower income taxes, higher earnings from Altria’s equity investment in SABMiller plc (SABMiller), and lower general corporate expenses, offset by higher interest expense, higher corporate exit costs, and lower OCI from cigarettes versus the prior-year period.

Michael E. Szymanczyk, Chairman and Chief Executive Officer of Altria: "The
premium brands of Altria`s tobacco operating companies, Marlboro, Copenhagen, Skoal and Black & Mild, continue to display great strength in a challenging operating environment."

Philip Morris USA`s cigarette shipment volume in the third quarter of 2009 was negatively impacted by the Federal Excise Tax increase (FET), which occurred earlier this year, a decline in trade inventories, as well as changes to PM USA`s pricing and promotional strategies on its portfolio brands. PM USA`s third quarter domestic cigarette shipment volume of 37.5 billion units was 16.4% lower than the prior-year period, but was estimated to be down about 12% when adjusted for changes in trade inventories. Marlboro`s cigarette shipment volume was down 15% in the third quarter of 2009, but was estimated to be down about 10% when adjusted for trade inventory changes, which disproportionally impacted the brand. Parliament, Virginia Slims and Basic all lost market share compared to the third quarter 2008.

Total cigarette industry volume was down an estimated 10% in the third quarter
of 2009 versus the comparable year-ago period, when adjusted for trade inventory
changes. In the third quarter of 2008 the trade increased cigarette inventories,
while in the third quarter of 2009 the trade substantially reduced inventory
levels.

For the first nine months of 2009, PM USA`s domestic cigarette shipment volume
of 112.5 billion units was 12.5% lower than the prior-year period, but was
estimated to be down about 10% when adjusted for changes in trade inventories
and calendar differences. Total cigarette industry volume was down an estimated
8% in the first nine months of 2009 when adjusted for trade inventory changes
and calendar differences.

US Smokeless Tobacco Company's (USSTC`s) premium share of moist snuff tobacco (MST) in the third quarter of 2009 was unchanged versus the second quarter of 2009 at 48.4%. Copenhagen`s MST retail share increased 0.2 share points to 24.0% and Skoal`s MST retail share declined 0.2 share points to 24.4%. USSTC`s MST retail share in the third quarter of 2009 declined 0.3 share points to 55.6% versus the second quarter of 2009.

Cigars - Middleton`s third-quarter cigar volume increased 3.9% versus the prior-year period to 341 million units. For the first nine months of 2009, Middleton`s cigar shipment volume declined 3.9% versus the prior-year period. Volume results in the three- and nine-month periods were estimated to be relatively stable when adjusted for changes in trade inventories and Middleton`s migration to the Altria Sales & Distribution system, as well as the timing of promotional shipments. Middleton believes that the long-term growth rate for machine-made large cigars industry volume remained 3%, however, the industry growth rate has slowed after the FET increase.

Altria Group, Inc. Q3 2009 Earnings Call Transcript. - More information on webcast coming..

Related news brief: Preview - Altria - second quarter 2009 results..

Reference: Altria Reports 2009 Third-Quarter Results, Reuters, 10/21/2009.