BUD Anheuser Busch Inbev SA NV

By Anne Steele 

Altria Group Inc.'s stake in beer behometh Anheuser-Busch InBev NV proved a boon in the final quarter of the year as cigarette volumes continued to wane and market share in the company's lead segment remained flat.

Cigarette-shipment volume fell 4.8% amid an overall industry decline and one fewer shipping day. Cigar volume was 5.3% higher and total smokable products declined 4.7%.

Altria, the U.S.'s largest tobacco company, faces strong competition from No. 2 player Reynolds American Inc. In the latest quarter, Altria's cigarette market share remained flat from a year ago at 51.4%, as Marlboro remained flat while a 0.1% increase in discount brands retail share was offset by and a 0.1% decrease in other premium cigarette sales. For cigars, Altria's market share slipped to 26.6% from 27.4%.

But during the quarter, Altria received a share of the newly enlarged Anheuser-Busch InBev following the Belgian brewer's just-completed roughly $100 billion takeover of rival SABMiller PLC.

The U.S. tobacco company received $5.3 billion in cash and a 9.6% share of AB InBev in exchange for its 27% stake in SABMiller. Altria said it would have two seats on AB InBev's board of directors, allowing it to continue using equity accounting practices to report its share of the brewer's profit as earnings.

In all for the December period, Altria's earnings rose to $10.28 billion, or $5.27 a share, from $1.25 billion, or 64 cents a share, a year prior. Earnings were lifted largely by the AB InBev/SABMiller transaction gain. Excluding items, per-share earnings rose to 68 cents. Analysts polled by Thomson Reuters had forecast earnings of 67 cents.

Net revenue after excise taxes grew 0.1% to $4.7 billion, just short of analyst estimates for $4.8 billion.

Altria forecast 2017 adjusted earnings in a range of $3.26 to $3.32 a share. That is just below the $3.33 a share analysts have predicted.

Shares, inactive premarket, have risen 17% over the past 12 months.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

February 01, 2017 08:01 ET (13:01 GMT)

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