Altria Group Inc.'s (MO) first-quarter profit rose 3.8% as cost controls helped offset weaker cigarette volumes.
Altria, the maker of Marlboro and other cigarette brands, has continued to benefit from growing interest in smokeless tobacco products such as Copenhagen, while sales of its cigarettes have been mixed. The company has posted mixed earnings over the past year after one-time charges masked its revenue growth.
The company is meanwhile undergoing a transition after Chairman and Chief Executive Michael Szymanczyk disclosed plans to retire in May. Vice Chairman Martin J. Barrington is slated to succeed him.
Altria reported a profit of $973 million, or 48 cents a share, up from $937 million, or 45 cents a share, a year earlier. Excluding write-downs, tax-related items and other adjustments, per-share earnings rose to 49 cents from 44 cents.
Revenue edged up 0.1% to $5.65 billion and grew 1.3% to $3.99 billion excluding excise taxes.
Analysts polled by Thomson Reuters expected a 49-cent per-share profit on $4.01 billion of revenue, excluding excise taxes.
Gross margin widened to 39% from 38.1%, an improvement the company attributed to effective cost management.
Revenue from smokeable products fell 0.8% on lower volumes and higher promotional activity for some brands, though operating earnings rose 5.1%. Smokeless product revenue edged up 0.3% as higher pricing, though earnings in the business slipped.
The company's volume of Marlboro cigarettes fell 3.4%, while other premium-cigarette volume dropped 9.5%. Discount-cigarette volume jumped 18%.
Shares of Altria, which affirmed its full-year guidance, closed at $31.69 Wednesday and were lightly traded premarket. The stock has climbed 21% over the past year.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909; Andrew.FitzGerald@dowjones.com