Results were solid and in line with analysts estimates at $.49 per share.  MO maintained its 2012 guidance as well in the range of $2.17 to $2.23.

 

In cigarettes, MO gained pretty good market share, primarily because they introduced Marlboro Black in the first quarter.  They expect that some of that is one time trials, and will therefore partly reverse in 2013.  Also, there was an extra day in the quarter due to leap year, and I would add that the weather was unusually warm across most of the US, which should have helped as more smokers will stand outside and smoke in nicer weather.  However, offsetting that was inventory reductions at wholesalers, which will likely help future quarters as they restock. Middleton cigars gained nice share and have been rolled into the same operating segment with cigarettes. Overall, adjusted operating income in this segment was up 3.9%.

 

Copenhagen gained nice market share again, while Skoal lost share due to the discontinuation of seven line extensions last year, as well as lapping the new product introduction made in last years first quarter.  Overall, operating income was up 8.8%.

 

Wine had a flat quarter.  SABMiller equity income was down, and PMCC income was up due to asset sales.  MO's stake in SABMiller remains unchanged, and at current market prices is worth a little over $18 billion before related tax issues.

 

So overall a solid quarter, but not one that I think changes the fundamental value of MO.  I'd still but a fair share price at around $26-$27, or about 12 times their expected EPS of $2.20 for 2012.  A 5.2% dividend yield while the fed keeps interest rates near zero likely continues to help support a higher PE ratio and price.