Altria (MO) reported its second-quarter results Wednesday. Adjusted earnings advanced 6% from the prior-year quarter and are now on pace to increase 5.4% for the full year (its pace through the first half). Income from the firm’s cigarettes segment increased nearly 3% on an adjusted basis, with Marlboro delivering sequential retail share growth of 0.4 percentage points. Both Copenhagen and Skoal also showed improving market share in the period. Altria is not immune to economic malaise, as it indicated that the business environment for 2011 will likely remain challenging, as adult consumers face personal financial pressure and high unemployment. However, the firm reiterated its full-year guidance for adjusted earnings in the range of $2.01 and $2.07, which reflects growth of about 9% on the high end.
In all, we are content with Altria’s quarter. We view this firm as a core long-term holding in our Best Ideas portfolio and expect to reap the benefits of a nice dividend stream on this name. In fact, during the first half of 2011, Altria has paid almost $1.6 billion in dividends. We expect the firm to continue to hike its dividend in coming years and will continue to watch Altria’s opeating performance closely through the course of the year.