July 24 (Bloomberg) -- Altria Group Inc., the largest seller of tobacco in the U.S., reported second-quarter profit that beat analysts’ estimates, helped by higher cigarette prices.
Net income rose to $1.23 billion, or 60 cents a share, from $444 million, or 21 cents, a year earlier, the Richmond, Virginia-based maker of Marlboro cigarettes said today in a statement. Excluding items, such as Altria’s investment in SABMiller, profit totaled 59 cents. Analysts projected 57 cents, the average of estimates compiled by Bloomberg.
Altria’s Philip Morris USA business raised prices on all cigarette brands by 6 cents a pack last month, the third increase in the past year. New packaging for Marlboro and last year’s introduction of a new variety, Marlboro Black, boosted the company’s share of U.S. smokers.
It was “a solid quarter as Marlboro brand building drives share gains,” Bonnie Herzog, an analyst with Wells Fargo & Co. in New York, wrote today in a note. She rates Altria shares outperform, the equivalent of a buy. “Higher list prices and effective cost management” boosted profitability, she said.
Altria said its market share advanced 0.8 percentage point to 50.1 percent. Operating margin for the cigarette unit widened 0.6 point to 41.4 percent
Altria rose 0.2 percent to $35.57 at the close in New York. The shares have advanced 20 percent this year.
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