Lately, Altria (NYSE:MO) has seemed invincible.

While competitors Reynolds American (NYSE:RAI) and Lorillard (NYSE:LO) continue to fight "the man" (i.e., FDA and government regulation of tobacco products), Altria has stayed out of the mix, focusing instead on product development and cost reduction. Even in a struggling economy for consumer products, Altria served up revenue growth (excluding excise taxes) of 9.9% and EPS growth of 8.9% in the June quarter.

But in the latest quarter, the world caught up with Altria. While the results weren't completely disappointing, they weren't as radiant as investors may have hoped.

Net revenue (excluding excise taxes) actually decreased by 0.5% on the quarter. As has been the case lately, cost cuts are propping up profit. Altria delivered an 8.8% reduction in cost of sales, thereby increasing gross profit by 8.2%. The company's equity stake in SABMiller (OTC: SBMRY) also nipped about $120 million from income. As a result, net profit grew by a dismal 1.7%.

With the UST acquisition and decline in earnings success, Altria's balance sheet has suffered as well. Over the past nine months, its cash is down by nearly 90%, to $1 billion, while inventory increased by 65%. Long-term debt lingers above $11 billion, up from $6.8 billion last December.

With the drastic increase in cigarette excise taxes this spring, it really was only a matter of time before Altria's volume took a hit. Marlboro continues to stake its place as a market leader, and even gained a 0.1% increase in share. Overall, though, Altria's portfolio of cigarette products actually delivered a share decline of 0.9%. Cigarette volume dropped by 16.4%, and revenue from that segment declined by 9.2%.

Reynolds American reports earnings tomorrow; it will be interesting to see whether the increases in excise taxes have hit them with subsequent volume declines. Philip Morris International (NYSE:PM) also serves up its earnings tomorrow, and while Altria outshone its kissing cousin last quarter, Philip Morris may benefit this time around, thanks to its non-U.S. based operations.

In the end, though, Altria's story for the quarter isn't all bad. The company did deliver earnings growth, and it's really focused on cutting costs to save the bottom line. Even better, Altria increased its dividend by 6.3%, to reward investors for hanging in there. 

Altria has stayed above the fray with all of the recent fighting over FDA regulation of tobacco. Now let's see how it can deal with excise taxes, which seem to be eating into revenue and volume growth.

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Fool contributor Colleen Paulson does not hold positions in any of the stocks mentioned above. The Fool's disclosure policy is sick of using these smoking-related puns for tobacco-company earnings results.