Altria Group Inc. (MO: Quote) Monday lowered its fiscal year 2012 financial outlook, citing one-time charges related to plans to buyback as much as $2 billion of debt. The largest cigarette maker in the U.S. is also offering new debt notes to fund the buyback.
In a statement, Altria said it is commencing a tender offer for up to $2 billion in aggregate principal amount of its four series of senior unsecured notes, which has total principal outstanding amount of about $8.3 billion. Altria indicated the offer will help it reduce debts scheduled to mature in certain future years.
Altria's priority is for two series of notes due 2018 and 2019. The company has also kept a limit of $500 million for the buyback of notes due in 2038 and 2039.
Concurrently, Altria also announced a public offering of senior notes, but did not reveal the amount of the offering. The company expects to use proceeds to fund the buyback and for other purposes.
As a result of the buyback, Altria expects to record a one-time charge of about $1.0 billion or $0.33 per share in the third quarter.
Altria now expects full-year 2012 earnings in a range of $1.96 to $2.00 per share, compared to prior estimate of $2.29 to $2.33 per share.
The company expects adjusted earnings of $2.19 to $2.23 per share for the full year, which represents a growth rate of 7 to 9 percent year-over-year. On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of $2.21 per share. Analysts' estimates typically exclude special items.
Altria said it expects adjusted earnings growth to moderate in the second half of 2012 compared to the first half, but anticipates fourth quarter performance to be stronger than the third quarter.
MO is currently trading at $36.01, up 0.25%, on the NYSE.
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by RTT Staff Writer
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