Altria Group's fourth-quarter profit dropped 56% as the Marlboro maker sold fewer cigarettes and recorded charges related to paying off debt early. Its adjusted earnings and revenue narrowly missed Wall Street expectations, and its shares slipped in premarket trading.
The owner of the nation's biggest cigarette maker, Philip Morris USA, posted earnings Thursday of $488 million, or $0.24 per share. That's down from $1.1 billion, or $0.55 a share, in the year-ago period. Excluding one-time items, earnings were $0.57 per share, missing Wall Street expectations by a penny.
Altria Group, based in Richmond, Va., said that revenue, excluding excise taxes, fell 1% to $4.4 billion as higher prices helped offset a decline in volumes. Analysts polled by FactSet expected $4.5 billion. The company also said Thursday it expects 2014 full-year adjusted earnings between $2.52 and $2.59 per share. Analysts expect $2.57 per share.
Cigarette volumes fell about 6% to 31.8 billion cigarettes compared with a year ago. Adjusting for trade inventory changes, cigarette volumes fell 4%, on par with the total industry decline.
Marlboro volumes fell 5.7%, while volume for its other premium brands fell by more than 11%, and volumes for discount cigarette brands like L&M increased 2%. Its share of the U.S. retail market rose 0.3 percentage points to 50.7%. Marlboro's share of the U.S. market rose 0.2 percentage points to 43.7%.
The Marlboro brand has been under pressure from competitors and lower-priced cigarette brands amid economic uncertainty and high unemployment.
That's on top of the tax hikes, smoking bans and a social stigma that have made the cigarette business tougher. Altria and others are focusing on cigarette alternatives -- such as electronic cigarettes, cigars, snuff and chewing tobacco -- for future sales growth because the decline in cigarette smoking is expected to continue.
Volumes of Altria's smokeless tobacco brands such as Copenhagen and Skoal fell 4.3% from a year ago. Adjusting for one less shipping day and trade inventory changes, Altria says its smokeless volumes grew about 5%. For the quarter, the company's smokeless tobacco brands had about 55% of the market, though smokeless tobacco is a tiny market compared with cigarettes.
Volumes for its Black & Mild cigars rose 8.5% during the quarter. Altria Group also owns a wine business, holds a voting stake in brewer SABMiller, and has a financial services division.
Source: http://www.fool.com
Showing posts with label marlboro. Show all posts
Showing posts with label marlboro. Show all posts
Friday, January 31, 2014
Friday, May 24, 2013
Marlboro Maker Moves Into E-Cigarettes
Altria Group (MO)
makes the Marlboro brand and is the world's largest cigarette
manufacturer. But sales of tobacco products have been in decline for
years, so Altria and others are looking at electronic cigarettes to make
up for some of their lost tobacco sales.
Altria said last week that it plans to roll out an e-cigarette later this year, as it tries to catch up to rivals who already have them on the market.
Lorillard (LO) has a leading brand – blu eCigs. And Reynolds American is looking to expand sales of its Vuse brand. British American Tobacco is working on what it calls a new "tobacco inhalation device" that is not an electronic cigarette.
The market so far is pretty small. According to The Wall Street Journal, sales totaled just $500 million dollars last year – less than one percent of tobacco sales. But the market for e-cigarettes is expected to double this year, and continue to grow.
And with tobacco sales declining, the industry needs a new source of revenue. Altria reported that cigarette sales in the U.S. tumbled 5.2 percent in the first quarter, and the industry-wide drop has been even steeper.
So how do these e-cigarettes work, and are they really any healthier than traditional tobacco-rolled cigarettes?
An advertisement we found on several popular websites lists some of the benefits. It claims e-cigarettes do not have any tar, tobacco or carbon monoxide. It also says there is no second-hand smoke.
The FDA is expected to release its report on e-cigs any day now. It doesn't currently regulate them, but is likely to push for that oversight responsibility. So far, it's said only that "further research" is needed into the potential health benefits and risks.
As we said, Altria is starting from behind, but analysts say it can use its size and strength to quickly catch up. Some say an acquisition is likely.
While e-cigarettes hold the potential to offset some of the sales declines, there's also the possibility that they could accelerate that trend, by cannibalizing existing sales. But some estimates, 20 percent of all smokers in the U.S. have tried e-cigarettes.
For smokers there are other benefits to the alternative. There's no second-hand smoke, you won't small like a cigarette, and you could save money. Each cartridge, which roughly equals a pack of cigarettes, costs about $2 – considerably less than the real thing.
Article source: http://www.dailyfinance.com
Altria said last week that it plans to roll out an e-cigarette later this year, as it tries to catch up to rivals who already have them on the market.
Lorillard (LO) has a leading brand – blu eCigs. And Reynolds American is looking to expand sales of its Vuse brand. British American Tobacco is working on what it calls a new "tobacco inhalation device" that is not an electronic cigarette.
The market so far is pretty small. According to The Wall Street Journal, sales totaled just $500 million dollars last year – less than one percent of tobacco sales. But the market for e-cigarettes is expected to double this year, and continue to grow.
And with tobacco sales declining, the industry needs a new source of revenue. Altria reported that cigarette sales in the U.S. tumbled 5.2 percent in the first quarter, and the industry-wide drop has been even steeper.
So how do these e-cigarettes work, and are they really any healthier than traditional tobacco-rolled cigarettes?
An advertisement we found on several popular websites lists some of the benefits. It claims e-cigarettes do not have any tar, tobacco or carbon monoxide. It also says there is no second-hand smoke.
The FDA is expected to release its report on e-cigs any day now. It doesn't currently regulate them, but is likely to push for that oversight responsibility. So far, it's said only that "further research" is needed into the potential health benefits and risks.
As we said, Altria is starting from behind, but analysts say it can use its size and strength to quickly catch up. Some say an acquisition is likely.
While e-cigarettes hold the potential to offset some of the sales declines, there's also the possibility that they could accelerate that trend, by cannibalizing existing sales. But some estimates, 20 percent of all smokers in the U.S. have tried e-cigarettes.
For smokers there are other benefits to the alternative. There's no second-hand smoke, you won't small like a cigarette, and you could save money. Each cartridge, which roughly equals a pack of cigarettes, costs about $2 – considerably less than the real thing.
Article source: http://www.dailyfinance.com
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