LONDON (ShareCast) - (Sharecast News) - Altria Group's shares dipped on Thursday after its first quarter earnings fell short of expectations and revenues dipped amid lower sales of smoke-able products.
The tobacco giant, which sells the iconic Marlboro cigarette brand in the US, said its revenues for the first three months of the year came in at $5.6bn, down 8% compared to the same quarter the year before, as lower shipment volumes in the smoke-able products segment were partially offset by higher pricing and lower promotional investments.

First-quarter net income came in at $1.12bn, or 60 cents per share, down 41% from $1.89bn, or $1 per share a year earlier, though it earned 90 cents per share when the unrealised losses associated with its investment into cannabis business Cronos and other items were excluded.

Analysts polled by Refinitiv had expected Altria to achieve earnings per share of 92 cents.

Howard Willard, Altria's chairman and chief executive, said: "As expected, Altria's first quarter adjusted diluted EPS declined in the mid-single digit range as we incurred higher interest expense as a result of our recently issued debt, without the full benefit of savings from our cost reduction program, which began to ramp up at the end of the quarter. We continue to expect full-year adjusted diluted EPS growth of 4% to 7%."

Full year EPS was expected to be in a range of $4.15 to $4.27, reflecting Altria's its expectation for a higher full-year adjusted effective tax rate, increased interest expense from the debt incurred to fund the Cronos and JUUL transactions, savings from a cost reduction program and increased investments related to Philip Morris USA's lead market plans for launching its IQOS electric smoking system.

The company stated that this guidance assumes little-to-no earnings or cash contributions from the Cronos and JUUL investments.

The New York-listed company's investments into Cronos, in which it holds a 45% economic and voting interest with a warrant to acquire an additional 10% equity stake, and Juul are an attempt by the business to combat decreasing numbers of smokers.

"After taking steps to position Altria for long-term success at the end of 2018, we entered 2019 with an evolved business platform that includes our strong core tobacco businesses and new strategic investments with tremendous potential for growth. We believe we've made significant progress in the first quarter on key initiatives to realize the potential of our evolved business platform," said Willard.

Altria Group's shares were down 4.53% at 52.23p at 1521 BST.

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