Altria Group, Inc. announced today that first-quarter 2003 net earnings decreased 7.6 percent to $2.2 billion, while diluted earnings per share fell 1.8 percent to $1.07. "Our first-quarter performance was in line with our expectations. However, our results were clearly overshadowed by developments in the Price class action suit against Philip Morris USA," said Louis C. Camilleri, chairman and chief executive officer of Altria Group, Inc.
"While the court's April 14 appeal bond order is onerous, we are pleased that Philip Morris USA can now promptly move forward with what I am convinced will be a successful appeal on the merits of the case. It is regrettable that credit rating agency action has denied us access, for now, to the commercial paper market. We are hopeful that such access will be restored in the relative near term."
In the first quarter of 2003, Altria's international tobacco business Philip Morris International (PMI) reported a 8.1 percent rise in operating companies income, versus the same period a year ago to $1.7 billion, due to volume gains, higher pricing and favorable currency translation of $85 million, partially offset by unfavorable mix and higher investment spending.
Shipment volume increased 3.6 percent to 190.7 billion units, due to gains in Central and Eastern Europe, Asia and Latin America, partially offset by lower volume in Western Europe and the Middle East. Total Marlboro shipments declined 1.5 percent in the first quarter, due primarily to tax-driven price increases in France and Germany, low-price competition in Italy and anti-American sentiment in certain markets. PMI achieved strong market share gains in many markets, including the key income markets of Germany, Japan, Russia, Spain and Turkey.
In Central Europe, the Middle East and Africa (CEMA), volume increased 6.2 percent, driven by strong gains in the Czech Republic, Poland, Romania and Turkey, partially offset by declines in Saudi Arabia, Egypt, Israel and Lebanon, reflecting consumer down trading as well as anti-American sentiment.
Volume for Kraft Foods International, Inc. (KFI) decreased 3.2 percent, as the impact of the decrease in Venezuela, the Easter shift and the divestiture of KFI's Latin America bakery ingredients business in 2002 were partially offset by the benefit of new product launches, successful marketing programs and the acquisition of the Kar Gida salted snacks business in Turkey.
Altria Group is the parent company of Kraft Foods Inc., with approximately 84 percent ownership of outstanding Kraft common shares, Philip Morris Capital Corporation, Philip Morris International Inc. and Philip Morris USA Inc. In addition, Altria Group, Inc. has a 36 percent economic interest in SABMiller plc, the world's second-largest brewer.
The brand portfolio of Altria Group, Inc.'s consumer packaged goods companies includes such well-known names as Kraft, Jacobs, L&M, Marlboro, Maxwell House, Nabisco, Oreo, Oscar Mayer, Parliament, Philadelphia, Post and Virginia Slims. Altria Group, Inc. recorded 2002 net revenues of $80.4 billion. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
