Altria Beats: Easily

Altria (MO) released results and the news was good, very good.

Excluding tax items and charges from asset impairment, earnings from continuing operations increased 18.9% to $1.21 a share, up from $1.07 a year earlier vs. analysts estimates of $1.14 a share.

Net income fell to $2.63 billion, or $1.24 a share, from $2.88 billion, or $1.36 a share, a year earlier, due to the spinoff of Kraft(KFT). Revenue rose 8.9 percent to $19.21 billion. Altria raised full year earnings expectations from continuing operations to be $4.20 to $4.25 a share, compared with its earlier forecast of $4.05 to $4.10 a share.

Said CEO Louis Camilleri "We continued to witness improvement in our business fundamentals, which generated robust earnings growth. In addition, we took numerous steps to accelerate our growth by investing behind product innovation and announcing our intention to pursue a further restructuring of our company."

Altria's U.S. tobacco business, achieved a record 50.6% retail market share, up 0.2 points, driven primarily by Marlboro, which increased its retail market share 0.5 points to a record 41.1%.

Philip Morris International (PMI), reported that its revenues net of excise taxes were up 9.3% to $5.9 billion. Operating companies income grew 18.8% to $2.5 billion, due primarily to higher pricing, favorable currency of $138 million and productivity and cost savings. Excluding the impact of asset impairment and exit costs, acquisitions and currency, operating companies income grew 10.2%.

As of 9/30/2007, Altria was sitting on $7.3 billion in cash vs $4.7 billion on 12/31/2006 and long term debt dropped from $6.2 billion on 12/31/2006 to $3 billion on 9/30/2007.

Could you really ask for more going into the PMI spin? The only thing that remains to be seen is if there is an update on the smokeless products on the call today. This company virtually has more money than it knows what to do with and for shareholders, that is very good news indeed. Do not expect anything to be said about it until the Jan. 30 board meeting at the earliest but, know that it is there piling up fast and also know that the company is a very shareholder friendly one. What does that mean? Expect a bunch of it to be coming back your way.

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