Altria Group

Altria - The Company

The Altria Group (NYSE: MO) is a holding which emerged out of the restructuring of Philip Moris Companies? which contains of Philip Morris USA Inc. and Philip Moris International Inc.? in 1985. During the same year General Foods was acquired for $5.6 billion? to become part of the group. 1988? in the largest non-oil acquisition in U.S. history? Altria Group bought Kraft for $12.9 billion. One year later? in 1989? General Foods and Kraft were combined to Kraft General Foods (owned by 85%)? the largest food company in the U.S.. Supplemented by Nabisco Holdings a world leader in cookies? crackers and snacks? along with the selling of Miller Brewing Company to South African Breweries (Altria now owns 36% economic and 24.9% voting interest in this worlds second largest brewing company)? Altria became what it is today - a leading consumer products company.

The company's leading cigarette brands include Marlboro? Basic and Chesterfield. With a total of 923 billion cigarettes sold in 2003? the company is the world's largest cigarette manufacturer with a market share of about 15.4%. But the performance of the U.S. and the international segment was quiet different. Mostly due to the fast declining U.S. market (more than 5% from 2002 to 2003 and almost 35% since 1994) PM USA suffered from a decrease of 2.3% in sales and 22.4% in operating income. In contrast to this PM International managed to increase revenue by 1.8% and operating income by 10.9%. However? the most valuable asset of these companies remains the strong brand image besides its market leadership.

Kraft? Jacobs? Milka? Oreo and Post are a few examples of the best known brands of Kraft General Foods. After weak a performance in the last few years due to heightened competition and the late reaction to the low-carbohydrate/high protein ideology? Kraft regained market share in 2004. So far? new product introduction and marketing initiatives caused revenue to rise by 4.3% to a total of $32.4? whereas operating income fell by 9%. While profits remain to stay under pressure as a result of high advertising? energy? packaging and commodity costs? product innovation and customization remains key issues for further development.

Although the name Altria Group officially exists only since January 2003? the history of its subsidiaries reaches as far back as 1767 for Kraft and 1847 for Philip Morris. Today the group has a market capitalization of almost $120 billion? revenue of $88.5 billion and a projected net income for 2004 of about $9.5 billion. Even though MO is selling its products in over 160 countries still 48% of revenues and 54% of operating income are earned in the U.S. market.

Recent News

11-18-2004: Altria upgraded by Prudential and Goldman Sachs

Prudential revised their expectations for Altria from Neutral to Overweight and Goldman Sachs was in line with that by upgrading the company from In-line to Outperform.

11-17-2004: Top Judges Have Doubts on Tobacco Penalty

A U.S. federal court panel on Wednesday expressed scepticism about whether the government had the power to force cigarette makers ...