Alliance One Rises on Larger 1Q Profit

Source from:  NEW YORK (AP) Wednesday August 15 08/16/2007

Alliance One International Reports Bigger 1st-Quarter Profit As Costs Decrease Shares of tobacco grower and processor Alliance One International Inc. climbed Wednesday after the company said its fiscal first-quarter profit grew 29 percent as charges from discontinued operations came off the books and expenses decreased. On Tuesday, the Morrisville, N.C.-based company reported that its net income rose to $6 million, or 7 cents per share, for the quarter ended June 30. A year earlier, it earned $4.6 million, or 5 cents per share. Revenue fell by 6 percent, to $461.7 million from $493.5 million. Alliance One reported that the total cost of goods it sold decreased 6 percent for the period. Alliance One was formed in May 2005, when Dimon Inc. and Standard Commercial Corp. combined. In the year-ago quarter, the company took $3.8 million in charges as it ended operations in Mozambique and Italy, and closed Dimon's non-tobacco business and Standard's wool unit. Davenport & Co. analyst Ann Gurkin said she had expected a profit of just "a couple pennies" per share on $400 million in revenue. Margins also were better than she expected, as the company raised its prices. Gurkin, the only analyst covering Alliance, maintained a "Buy" rating and price target of $11 per share. She thinks the company will earn 70 cents per share for the fiscal year ending March 31. "We remain confident that Alliance will successfully navigate near-term operating challenges," she said. "We continue to expect Alliance to deliver earnings driven by improving margins and cost realizations." Shares rose 66 cents, or 9.5 percent, to $7.65. The stock has traded between $3.80 and $12.19 in the last 52 weeks. Enditem