Altria ( MO) will collect $1 billion from the government based on the outcome of a four-year tax review by the Internal Revenue Service.

About $337 million of the payment will be reimbursed to Altria's 84% subsidiary, Kraft ( KFT). The cigarette giant said the noncash benefits are the result of the reversal of previously recorded tax reserves.

As a result of the decision, Altria raised its 2006 earnings guidance to $5.25 to $5.35 a share, up from $4.85 to $4.95 a share. The new guidance also incorporates a 5-cent charge related to Kraft's sale of Milk-Bone to Del Monte ( DLM).

Kraft raised its full-year earnings guidance by 17 cents to a range of $1.55 to $1.60 a share.

Altria shares gained 73 cents, or 1%, to $74.60. Kraft added 21 cents, or 0.7%, to $30.35.