RICHMOND, Va. (AP) -- Altria Group's third-quarter profit more than doubled as the Marlboro maker paid out less in legal settlements and freed itself from charges related to paying off debt early last year.
Higher prices and volumes for both cigarettes and smokeless tobacco bolstered its underlying results, which topped Wall Street expectations.
The owner of the nation's biggest cigarette maker, Philip Morris USA, posted earnings Thursday of $1.39 billion, or 70 cents per share. That's up from $657 million, or 32 cents a share, in the year-ago period, which included a $874 million charge for a loss on early extinguishment of debt.
Excluding one-time items, earnings were 65 cents per share, beating analyst estimates by a penny. That excludes a $145 million benefit from credits for disputed payments under the 1998 Master Settlement Agreement in which some cigarette makers are paying states for smoking-related health care costs.
Revenue for the Richmond, Va., company, excluding excise taxes, increased 6.6 percent to $4.8 billion. Analysts expected $4.53 billion, according to FactSet.
Its shares fell 13 cents to $36.25 in early morning trading Thursday.
Volumes increased more than one percent to 34.1 billion cigarettes compared with a year ago. Adjusting for trade inventory changes, cigarette volumes fell 3 percent during the quarter, compared with a total industry decline of 3.5 percent.
Marlboro volumes grew 1.5 percent, while volume for its other premium brands fell by more than 7 percent, and volumes for discount cigarette brands like L&M increased 5 percent.
Its share of the U.S. retail market rose 0.2 percentage points to 50.7 percent. Marlboro's share of the U.S. market was flat at 43.7 percent.
The Marlboro brand has been under pressure from competitors and lower-priced cigarette brands amide economic uncertainty and high unemployment.
That's on top of the tax hikes, smoking bans and a social stigma that have made the cigarette business tougher.
The Marlboro brand sold for an average of $5.86 per pack during the third quarter, compared with an average of $4.36 per pack for the cheapest brand.
The company has introduced several new products with the Marlboro brand, often with lower promotional pricing, to try to keep the brand growing and to lure smokers away from its competitors.
Altria and others are focusing on cigarette alternatives — such as electronic cigarettes, cigars, snuff and chewing tobacco — for future sales growth because the decline in cigarette smoking is expected to continue.
After launching its first electronic cigarette under the MarkTen brand in Indiana in August, Altria said Thursday that its NuMark subsidiary plans to expand into Arizona in December.
Volumes of Altria's smokeless tobacco brands such as Copenhagen and Skoal rose 9.5 percent from a year ago. Adjusting for an extra shipping day and trade inventory changes, Altria says its smokeless volumes grew about 4 percent. For the quarter, the company's smokeless tobacco brands had about 55 percent of the market, though smokeless tobacco is a tiny market compared with cigarettes.
Volumes for its Black & Mild cigars rose 6 percent during the quarter.
Altria Group Inc. also owns a wine business, holds a voting stake in brewer SABMiller, and has a financial services division.
Michael Felberbaum can be reached at https://www.twitter.com/MLFelberbaum.