May 2 (Bloomberg) -- Altria Group Inc., the largest U.S. tobacco company, said it will raise prices on top-selling Marlboro and its other cigarette brands as of May 5 to cover higher costs.

Altria will cut its distributors' discount on Marlboro, Basic and L&M cigarettes by 9 cents a pack while eliminating the discount of 20 cents on Parliament, David Sylvia, a spokesman for the Richmond, Virginia-based company, said today in a telephone interview. A price increase of 9 cents a pack will be implemented for Virginia Slims and Altria's remaining brands.

The increases follow Altria's first earnings report after spinning off its overseas tobacco unit. Operating profit fell short of expectations by Judy Hong, a Goldman Sachs Group Inc. analyst in New York.

Hong removed Altria from Goldman's ``conviction buy list'' on April 25 while still advising investors to buy the stock. She cited costs for shifting production and closing Altria's New York headquarters and Marlboro promotional spending that was higher than she had expected.

Altria rose 31 cents to $20.43 at 4:15 p.m. in New York Stock Exchange composite trading.

To contact the reporter on this story: Chris Burritt in Greensboro, North Carolina, at cburritt@bloomberg.net.

Last Updated: May 2, 2008 18:05 EDT