NEW YORK – Altria Group Inc. (MO), whose products include Marlboro cigarettes and Velveeta cheese, Friday stood by its forecast for 2004 earnings of $4.50 to $4.60 a share.
The forecast includes special items such as anticipated charges for the restructuring of Kraft Foods Inc. (KFT), potential charges for a draft tobacco agreement under discussion with the European Commission (search), and the impact of an expected lower tax rate.
Excluding such items, Altria's forecast is in line with analysts' expectations.
Shares of Altria, which have sunk in recent months amid a string of setbacks in U.S. tobacco litigation, closed at $48.48 the New York Stock Exchange (search) on Thursday. As recently as March, the shares reached $58.96, their highest level in more than five years. Since then, Florida's top court said it would review a landmark tobacco verdict that had been overturned, and a federal judge refused to limit the amount of penalties the government is seeking from Altria and other major tobacco companies in a civil racketeering trial.
For the year to date, the stock has lagged the Dow Jones industrial average (search), of which it is a component, by more than 12 percent. Of the stocks that comprise the index, only Alcoa and Intel have performed more poorly than Altria.
The stock market is closed Friday for the funeral of former President Ronald Reagan.
Altria said it still expects charges of 23 cents per share this year for costs related to Kraft's restructuring and other items, and potential charges of about 11 cents per share for the draft international tobacco agreement under discussion with the European Commission.
In early April, the European Commission and Philip Morris International (search), Altria's international cigarette unit, said they were negotiating a $1 billion payment to end a dispute over cigarette smuggling.
Altria also still expects to benefit from a lower overall effective tax rate that is expected to result from the final resolution of certain U.S. and foreign tax matters.
Analysts expect Altria to earn $4.79 to $4.92 per share this year, with a mean target of $4.84, excluding special items, according to Reuters Estimates.
The company posted net earnings of $4.52 a share for 2003.