Altria Group (MO) Announces $2B Note Offer; Cuts FY12 GAAP EPS Outlook
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Price: $37.44 +0.70%
EPS Growth %: +40.8%
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Excise taxes on products: 1.78B
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EPS Growth %: +40.8%
Financial Fact:
Excise taxes on products: 1.78B
Today's EPS Names:
LBIX, ESEA, ISS, More
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Altria Group, Inc. (Altria) (NYSE: MO) today announced that it is commencing a cash tender offer for up to $2,000,000,000 aggregate principal amount (the “Tender Cap”) of its senior unsecured notes identified in the table below (the “Notes”). The offer will permit Altria to reduce its debt scheduled to mature in certain future years. Concurrently, Altria commenced an underwritten public offering of senior unsecured notes (the “New Notes”). Altria expects these transactions to reduce the weighted average coupon rate and future interest expense of its consolidated debt.
ltria expects to record a one-time pre-tax charge of approximately $1.0 billion or $0.33 per share against reported earnings in the third quarter of 2012, reflecting the estimated loss on early extinguishment of debt related to this debt tender offer (the “Estimated Charge”). The Estimated Charge assumes current market pricing and that $2.0 billion in Notes are tendered. The final pre-tax charge will vary to the extent that the pricing and amount of Notes tendered differ from Altria’s original assumptions.
Altria revises its 2012 full-year guidance for reported diluted EPS from a range of $2.29 to $2.33 to a range of $1.96 to $2.00, reflecting the Estimated Charge. The Street sees EPS of $2.21. The revised forecast reflects estimated total net expenses of $0.23 per share, consisting of the Estimated Charge and asset impairment, exit and implementation costs related to the current cost reduction program, partially offset by SABMiller plc (SABMiller) special items and a Philip Morris Capital Corporation (PMCC) leveraged lease benefit.
Altria reaffirms its 2012 full-year guidance for adjusted diluted EPS, which excludes special items shown, to be in the range of $2.19 to $2.23, representing a growth rate of 7% to 9% from an adjusted diluted EPS base of $2.05 per share in 2011. Altria anticipates adjusted diluted EPS growth to moderate in the second half of 2012 compared to the first half of 2012. Altria expects the debt tender transaction to impact 2012 third-quarter adjusted diluted EPS negatively, primarily due to an increase in Altria’s 2012 full-year effective tax rate on operations. Altria believes that adjusted diluted EPS performance will be stronger in the fourth quarter compared to the third quarter of 2012.
The Street sees Q3 EPS of $0.59.
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ltria expects to record a one-time pre-tax charge of approximately $1.0 billion or $0.33 per share against reported earnings in the third quarter of 2012, reflecting the estimated loss on early extinguishment of debt related to this debt tender offer (the “Estimated Charge”). The Estimated Charge assumes current market pricing and that $2.0 billion in Notes are tendered. The final pre-tax charge will vary to the extent that the pricing and amount of Notes tendered differ from Altria’s original assumptions.
Altria revises its 2012 full-year guidance for reported diluted EPS from a range of $2.29 to $2.33 to a range of $1.96 to $2.00, reflecting the Estimated Charge. The Street sees EPS of $2.21. The revised forecast reflects estimated total net expenses of $0.23 per share, consisting of the Estimated Charge and asset impairment, exit and implementation costs related to the current cost reduction program, partially offset by SABMiller plc (SABMiller) special items and a Philip Morris Capital Corporation (PMCC) leveraged lease benefit.
Altria reaffirms its 2012 full-year guidance for adjusted diluted EPS, which excludes special items shown, to be in the range of $2.19 to $2.23, representing a growth rate of 7% to 9% from an adjusted diluted EPS base of $2.05 per share in 2011. Altria anticipates adjusted diluted EPS growth to moderate in the second half of 2012 compared to the first half of 2012. Altria expects the debt tender transaction to impact 2012 third-quarter adjusted diluted EPS negatively, primarily due to an increase in Altria’s 2012 full-year effective tax rate on operations. Altria believes that adjusted diluted EPS performance will be stronger in the fourth quarter compared to the third quarter of 2012.
The Street sees Q3 EPS of $0.59.
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