This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

On The Call: Altria Group CEO Marty Barrington

Stocks in this article: LOMOPMRAI

The Associated Press

Altria Group Inc., the owner of the biggest U.S. cigarette maker, Philip Morris USA, continues to focus its efforts on building its premium Marlboro brand which has been under pressure from competitors and lower-priced cigarette brands as consumers face economic challenges and unemployment remains high.

Those challenges are in addition to the tax hikes, smoking bans, health concerns and social stigma that have made the cigarette business tougher.

The Richmond, Va., company has introduced several new products with the Marlboro brand, often with lower promotional pricing. They include "special blends" of both menthol and non-menthol cigarettes to try to keep the brand growing and steal smokers from its competitors, who also have fought cigarette sales declines with promotional prices.

Altria recently introduced Marlboro Black in both menthol and non-menthol versions, which the company said distinguishes the product's "bold flavor." It also introduced Marlboro Eighty-Threes during the second quarter, which the company says provides "classic Marlboro flavor in modern, updated packaging."

While Marlboro's shipment volume declined less than one percent to 31.4 billion cigarettes in the second quarter, the top-selling brand gained 0.3 points of market share to end up with 42.9 percent of the U.S. market.

An increase of 24 percent in its discount cigarette brands such as Basic and L&M offset declines in its premium brands, as overall cigarettes volumes were flat in the quarter.

Less-expensive brands such as Pall Mall from Reynolds American Inc. and Maverick from Lorillard Inc. have attracted more smokers looking to save money.

Marlboro sold for an average of $5.71 per pack during the first quarter, compared with an average of $4.20 per pack for the cheapest brand.

In a conference call with analysts Tuesday regarding second-quarter earnings for Altria, CEO Marty Barrington discussed Marlboro's brand architecture.

QUESTION: As far as Marlboro's market share and pricing dynamics, how do you get comfort from the investments that are being made to build the brand's equity?

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,637.86 +23.05 0.14%
S&P 500 1,943.78 +2.50 0.13%
NASDAQ 4,422.6990 +3.2210 0.07%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs