Altria (NYSE: MO), the parent of cigarette maker Philip Morris, announced today that third quarter profits rose by 28% driven by higher cigarette prices and strong sales for its smokeless products.
For the third quarter ending September 30, the company posted profits of $1.1 billion, or $0.54 per diluted share, compared to $883 million, or $0.43 per share, for the third quarter of 2009. Revenues increased by 1.6% year-over-year to $6.4 billion.
The results exceeded analyst expectations of $0.52 profit on revenues of $4.42 billion.
Philip Morris produced about $5.7 billion in revenue - a 1.8% increase from the year-ago period. The cigarette revenue was negatively affected by a 2.4% decline in unit sales, but this was offset by higher cigarette prices.
Almost 87% of the company's cigarette unit sales came from the Malboro brand. According to data from a retail tracking company, the Malboro brand has a market share of almost 43%.
Wine and cigar products contributed about $254 million to total revenues. While cigar unit sales were relatively stagnant, the amount of wine sold increased by 4.5%. Altria's wine business was inherited through the company's $11.7 billion acquisition of UST, a smokeless tobacco manufacturer, in January 2009.
The smokeless tobacco product business increased its revenues by 10.5% to $389 million. The division's unit sales increased by 16.4%.
Altria increased 2010 guidance of diluted earnings per share from a range of $1.81 to $1.85 to a range of $1.83 to $1.87. The company also re-affirmed its guidance for adjusted diluted earnings per share in the range of $1.87 to $1.91.
Altria's shares edged higher by 0.5% to trade at $24.88 as of 11:37 am ET.