Marlboro Maker Altria 4Q Profit Up 32 Percent
Its share of the U.S. retail market rose 1 percentage point to 49.8 percent. Marlboro brand gained 1 percentage point of market share to end up with 42.6 percent of the U.S. market.
The 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.
Altria recently introduced Marlboro NXT â¿¿ a cigarette that can be switched to menthol by crushing a capsule in the filter. It has said it has a pipeline of innovative products to supplement the Marlboro brand.
The company still faces pressure from less-expensive brands such as Pall Mall from Reynolds American Inc. and Maverick from Lorillard Inc. Marlboro sold for an average of $5.80 per pack during the fourth quarter, compared with an average of $4.26 per pack for the cheapest brand.Like other tobacco companies, Altria is focusing on cigarette alternatives â¿¿ such as cigars, snuff and chewing tobacco â¿¿ for future sales growth because the decline in cigarette smoking is expected to continue. Volumes of its smokeless tobacco brands such as Copenhagen and Skoal rose nearly 10 percent from a year ago. For the quarter, the company's smokeless tobacco brands had 55.4 percent of the market, which is tiny compared with cigarettes. The company said inventory changes and retail share losses drove volumes for its Black & Mild cigars down 1 percent during the quarter. Altria Group Inc. also owns a wine business, holds a voting stake in brewer SABMiller, and has a financial services division. For the full year, the company said it earned $4.18 billion, or $2.06 per share, compared with a profit of $3.39 billion, or $1.64 per share, a year ago. Revenue, excluding excise taxes, rose 5 percent to $17.5 billion. Cigarette volumes were essentially flat at 134.9 billion cigarettes. Its full-year U.S. retail share increased 0.8 percentage points to 49.8 percent of the market. Smokeless tobacco volumes grew about 4 percent and it claimed 55.4 percent of the U.S. retail market.
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