Movers: Companies in the News

Source from:  By - Chris Burritt Bloomberg News November 2, 2007 11/08/2007

As cigarette sales fall, Altria looks to cigars Altria Group, the world's largest publicly traded tobacco company, agreed to buy the cigar maker John Middleton for $2.9 billion in cash to offset falling cigarette sales in the United States. John Middleton, the maker of Black & Mild cigars and a unit of Bradford Holdings, could have revenue of $350 million this year, the companies said Thursday. The purchase puts Altria in a growing market as it prepares to separate its international division from the U.S. cigarette unit. The acquisition is the biggest in the 105-year history of Altria's Philip Morris USA division. John Middleton will lessen the company's dependence on cigarettes as demand for the top-selling Marlboro brand declines. Altria plans to increase the cigar unit's sales by selling them through its distribution network, which delivers one of every two cigarettes sold in the United States. Altria's cigarette sales and deliveries to wholesalers are falling, while John Middleton's revenue has grown by 10 percent annually since 2003. The Black & Mild brand generates 23 percent of U.S. sales of machine-made large cigars, the companies said. Revenue at Philip Morris USA, based in Richmond, Virginia, declined 0.6 percent to $9.1 billion in the first half of 2007. Falling cigarette shipments contributed to a 12 percent decline in operating profit to $2.1 billion. Philip Morris USA delivered 71 billion Marlboro cigarettes to distributors in the first half of 2007, 4.1 percent fewer than in the same period a year earlier, Altria said in a quarterly SEC filing. Last month, the company began marketing snuff under the Marlboro brand in Atlanta. It trails UST and Reynolds in smokeless tobacco, a $3.7 billion market that grew more than 8 percent last year. "Altria sees snuff and cigars as the two fastest-growth adjacent tobacco categories to cigarettes," Erik Bloomquist, a JP Morgan analyst in London, wrote Thursday in a note to clients. Plan to reduce jobs pushes up Aon stock Shares of Aon, the world's second-largest insurance brokers, rose Thursday after the company said it would cut 6 percent of its work force. Aon will eliminate 2,700 jobs as falling commercial insurance rates threaten sales. The company, based in Chicago, announced the plan after the close of regular trading Wednesday. "Aon's ability to expand margins through their restructuring efforts is in stark contrast to its larger competitor," Marsh & McLennan, said David Small, an analyst at Bear Stearns, in a research note Wednesday. The company's profit was 70 cents a share, excluding items like severance pay and revenue from insurance businesses it sold or shut down, beating the 59 cent average estimate of 13 analysts surveyed by Bloomberg. The shares gained $1.95, or 4.3 percent, to $47.27 in afternoon trading in New York on Thursday. Deutsche Börse shares soar on record profit Shares of Deutsche Börse rose to the highest level ever Thursday after the exchange posted third-quarter profit that surpassed analysts' estimates and said it expected a "record result in 2008." The shares added €5.66, or 5.2 percent, to close at €114.56, or $165.38, in Frankfurt trading. The stock has climbed 64 percent this year. The shares earlier rose to an intraday high of €117. Net income rose 36 percent in the third quarter to €238.2 million, a record high, as turbulence in the financial markets generated increased stock and derivatives trading, Deutsche Börse said late Wednesday. M.video makes debut on Russian exchange M.video, one of the biggest Russian electronics retailers, raised $365 million in its first public offering of stock, intended to finance new store openings. Investors bought 52.5 million shares for $6.95 each, representing a total stake of about 30 percent, the Moscow-based company said Thursday. M.video will get about $203 million of the offering's proceeds, with the rest going to owners, including Alexander Tynkovan, the co-founder and majority stakeholder. The shares rose as high as $7.24 on their Russian Trading System debut and closed 1.2 percent higher, at $7.03. They were allotted to Russian investors and to institutional buyers, mostly in Britain and on the Continent, M.video said. The M.video chain, with 110 stores, aims to expand to 122 outlets by the end of this year. Enditem