AP News

Altria plans to buy back up to $2B of debt

RICHMOND, Va. (AP) — Cigarette company Altria Group Inc. plans to buy back up to $2 billion of long-term debt to help lower its interest expense.

That follows another $2 billion debt buyback announced in August 2012.

The Marlboro maker anticipates taking a one-time charge of about 35 cents per share in the fourth quarter related to the latest tender offer.

The Richmond, Va., company lowered its full-year earnings forecast to a range of $2.22 to $2.27 per share to account for the charge. Its prior guidance was for earnings between $2.57 and $2.62 per share.

Altria still foresees full-year adjusted earnings of $2.36 to $2.41 per share. Analysts polled by FactSet predict earnings of $2.40 per share.

Altria said Monday that it is also selling new senior unsecured notes via a public offering.

Thilo Wrede of Jefferies said in a client note that Altria will likely use $1.5 billion in proceeds from the new tender offer to retire 2038 and 2039 notes, as it only retired notes from 2018 and 2019 with last year's tender offer.

Shares of Altria Group climbed 38 cents to $36.63 in afternoon trading.

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