Updated from 10:33 a.m. EST

Altria ( MO) formalized its long-held plans to spin off its 89% stake in food giant Kraft ( KFT).

The New York-based maker of Marlboro cigarettes also reported a fourth-quarter profit that topped Wall Street's expectation.

Altria said Wednesday it will distribute 0.7 Kraft shares for every Altria share in a distribution payable March 30 to holders of record March 16.

Altria has been eager to spin Kraft off to shareholders in a bid to separate the food business from its tobacco business. Until now the move was held up by legal battles, including a class-action suit over so-called light cigarettes.

Separately, Altria said its fourth-quarter net income rose to $2.96 billion, or $1.40 a share, from $2.29 billion, or $2.29 a share, a year earlier.

Excluding several one-time items, earnings were $1.27 a share, compared with $1.17 in the year-earlier quarter. Analysts polled by Thomson Financial projected earnings of $1.22 a share.

Revenue rose 3.7% to $25.4 billion from $24.49 billion.

Operating income at the company's U.S. Philip Morris division increased 4.2% to $1.1 billion, as lower wholesale promotional allowance rates offset a decline in volume. Shipment volume slid 0.4% to 45.3 billion units.

At Kraft, volume declined 4.4%, reflecting in part one less week in the quarter. Revenue declined 3% to $9.4 billion.

Altria forecast 2007 earnings from continuing operations of $4.15 to $4.20 a share, excluding Kraft. The company's projection includes a higher tax rate in 2007, and charges of roughly 8 cents a share.

Analysts, on average, project earnings of $5.31 a share, though that forecast isn't directly comparable to the company's guidance.

Altria shares recently were up 7 cents to $87.61. Kraft rose 14 cents to $34.97.