June 9, 2010 - Fitch expects a low single digit increase in Altria's net revenue excluding excise taxes in 2010 after Altria's challenging 2009 year. Altria's 2009 results were hampered in large part by the significant $0.62 per pack Federal Excise Tax (FET) increase on cigarettes which went into effect April 1, 2009. Operating income is anticipated to improve in the mid single digits as cost savings from rationalizing production and synergies from the UST acquisition are realized. Altria's 2010 results are likely to face continued headwinds in the form of state excise tax increases. States are grappling with substantial budget deficits, and tobacco excise tax increases face less political resistance than other revenue raising options state governments have.
Reference: Fitch Rates Altria's Proposed Sr Notes 'BBB+'; Outlook Stable, SOURCE: Fitch Ratings, TradingMarkets.com 6/8/2010.
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