Altria Singed After Philip Morris Spinoff

Shares slip after the maker of Marlboro cigarettes reports 58% drop in second-quarter earnings.
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Altria

(MO) - Get Report

reported second-quarter earnings that tumbled 58% from the year-ago quarter following the spinoff of its

Philip Morris International

(PM) - Get Report

unit.

The Richmond, Va., producer of Marlboro cigarettes and other tobacco-related products said it had net income of $930 million, or 45 cents a share, down from $2.21 billion, or $1.05 a share, in the year-ago period. Adjusted for one-time items, Altria had a profit of 46 cents a share, which topped the average analyst estimate by a penny, according to Thomson Reuters.

Revenue in the quarter rose 4% from a year ago to $5.1 billion, well above observers' forecast of $4.17 billion. Still, shares of Altria were slipping 2.1% to $21.25.

Altria also reaffirmed its 2008 guidance, with the company expecting an adjusted profit in a range of $1.63 a share to $1.67 a share. Altria said it continues to expect mid-single-digit income growth from continuing operations at full-year operating companies. Wall Street expects the company to post an annual profit of $1.67 a share.

"During the second quarter, Altria delivered strong earnings-per-share growth, reflecting our commitment to deliver substantial shareholder return," said Chairman and CEO Michael Szymanczyk. "Altria is reaffirming its 2008 earnings-per-share guidance, reflecting confidence in the strength of our businesses."

On the negative side, Philip Morris USA's domestic cigarette shipment volume slid 4.5% from a year ago to 43.6 billion units, although the company estimated that number to fall approximately 3.5% when adjusted for changes in trade inventories. For the full year, Philip Morris USA estimates a total cigarette industry volume decline of approximately 3% to 3.5%, the company said.

On the bright side, Marlboro saw its retail share increase by 0.8 share points vs. the prior-year period to a record 41.8%.

Among its rivals,

British American Tobacco

(BTI) - Get Report

was down 1.9%, while

Reynolds American

(RAI)

was unchanged.