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Cash from beer stake helps boost fourth-quarter earnings for Marlboro group Altria

The US's largest tobacco company saw its earnings rise to US$10.28bn, up from US$1.25bn, boosted by the US$5.3bn cash Altria received for its stake in SABMIller.
Cigarette packet
Altria said cigarette-shipment volumes fell 4.8% amid an overall industry decline

Cash from its stake in taken-over beer firm SABMiller PLC helped boost fourth-quarter earnings for Marlboro group Altria Group Inc (NYSE:MO) despite cigarette volumes continuing to fall.

The US's largest tobacco company saw its earnings rise to US$10.28bn, or US$5.27 a share, up from US$1.25bn, or 64 US cents a share a year earlier, boosted by the US$5.3bn cash Altria received for its stake in SABMIller.

The cigarette maker also received shares totalling a 9.6% stake in purchaser, Budweiser- brewer Anheuser-Busch InBev NV in exchange for its 27% holding in SABMiller, which was bought for around US$100bn.

Altria said it would have two seats on AB InBev's board of directors, allowing it to continue to report its share of the brewer's profit as earnings.

Earnings beat, sales miss …

The tobacco firm’s adjusted earnings per share were 68 US cents for the December quarter, slightly above analysts’ forecasts for 67 US cents, while net revenue after excise taxes rose 0.1% to US$4.7bn, just short of estimates for US$4.8bn.

Altria forecast 2017 adjusted earnings in a range of US$3.26 to US$3.32 a share.

The firm - facing strong competition from number two player Reynolds American Inc. (NYSE:RAI) which UK giant British American Tobacco plc (LON:BATS) is vying to take control of – saw cigarette-shipment volume fall 4.8% amid an overall industry decline and one fewer shipping day.

Altria's cigarette market share was essentially unchanged 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.

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