Altria's ( MO) third-quarter earnings rose 8.9% from a year ago as strong overseas tobacco sales made up for cost-related weakness at its publicly-traded Kraft ( KFT) unit.

Altria earned $2.88 billion, or $1.39 a share, in the quarter, compared with $2.65 billion, or $1.29 a share, a year ago. Net revenue rose 10.4% from a year ago to $24.96 billion. For all of 2005, the company raised the low end of its earnings forecast to $5.05 a share, from $5 a share, and left the high end at $5.10.

Analysts were expecting $1.33 a share in the quarter and $5.09 a share in the year. As always, Altria's earnings include copious special items and might not be comparable to the consensus.

Earnings were juiced by a 19.7% jump in international tobacco income to $2.2 billion, driven by higher prices, acquisitions and favorable currency translation. Cigarette shipment volume for Philip Morris International rose 9% to 217 billion units, reflecting strength in Eastern Europe, Turkey and the Middle East.

In the U.S., operating profit rose 4.8% to $1.2 billion, driven by lower wholesale discounting and the reversal of a year-ago accrual related to a trade law. Domestic volume slipped 0.9% to 47.9 billion units but was flat when adjusted for promotional shipments and the timing of trade purchases.

"Philip Morris USA achieved a retail share of more than 50%, driven by Marlboro's record share, and strong income growth," Altria said. "Philip Morris International increased its share in many key markets and also posted strong income gains, supplemented by the Sampoerna acquisition."

Results at Kraft were less robust as the food unit struggled with rising energy and commodities costs. Kraft North America contributed $948 million of operating income to Altria in the third quarter, down 10.2% from a year ago, while its international segment contributed $252 million, up 12.5%.

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