Altria Doesn’t Light it Up (MO, RAI, LO, PM)

Altria Group Inc. (NYSE: MO), the maker of Marlboro cigarettes and other products, reported earnings this morning that did not match expectations. The consensus estimate for EPS was $0.49 and the revenue estimate came in at $4.01 billion. Last year the company posted EPS of $0.44 on revenue of $3.94 in its first quarter.

Adjusted EPS came in at $0.49, right on the estimate, but revenue of $3.98 billion was low. Total sales came in at $5.1 billion, but tobacco-related settlement charges are backed out. Earlier this week Reynolds American Inc. (NYSE: RAI) and Lorillard Inc. (NYSE: LO) reported soft earnings for the quarter. Only Altria’s sister company, Philip Morris International Inc. (NYSE: PM) beat earnings estimates in the first quarter.

Altria, which also owns about 27% of brewing giant SABMiller, did not get any help from beer sales in the quarter. In all, SABMiller contributed $0.01 to Altria’s adjusted EPS.

And as with Reynolds and Lorillard, cigarette sales volume was down — in Altria’s case -2.5%. (Yes, we know the joke.) Marketing and promotional costs were also higher. Net revenues were down -0.8% year-over-year although operating margins rose 1.5% to 41%.

The company reaffirmed full-year adjusted EPS guidance of $2.17-$2.23. The consensus estimate is $2.20. In the first quarter, share buybacks totaled about $294 million and the company has approximately $378 million remaining of its authorized $1 billion share buyback program. Altria boasts a dividend yield of 5.1%, paying an annual dividend of $1.64/share.

Shares of Altria are up 0.35% in the pre-market at $31.80 in a 52-week range of $23.20-$32.10.

Paul Ausick