Altria Group Inc. has performed well even in a tough economy in part because of its diversification strategy in recent years, executives with the Henrico County-based company said Monday at an investor conference.
The company, owner of top cigarette maker Philip Morris USA, has seen its share of the total “profit pool” of U.S. tobacco companies grow from about 46 percent in 2007 to about 55 percent in 2010.
In part, that is because of its acquisitions since 2007 of smokeless tobacco company UST Inc. and cigar maker John Middleton Inc., which moved the company into growing tobacco categories as cigarette consumption has slowly declined.
“These transformative acquisitions enabled Altria to diversify the income streams for the company, add strong premium brands, and use the existing infrastructure of Philip Morris USA to reduce costs substantially and create what we believe is a business model with significant competitive advantages,” Michael E. Szymanczyk, Altria’s chairman and chief executive officer, said at the conference in New York. On Monday, Altria said it still expects earnings of $2 to $2.06 per share. It also reiterated its 2011 adjusted earnings outlook in a range of $2.01 to $2.07 per share.
Analysts surveyed by FactSet expect earnings of $2.05 per share for the year.
Its shares fell 28 cents, or 1.18 percent, to $23.51 Monday on the New York Stock Exchange.
- Altria plans expansion of Marlboro snus
- New products key for tobacco company, CEO says
- Altria Announces New Management Structure
- Altria Group 1st-quarter profit up as Marlboro gains market share, company cuts costs
- Altria’s Profit Rises on Marlboro Prices, Snuff Demand