The market for e-cigarettes has grown from the thousands of users in 2006 to several million worldwide. Analysts estimate sales could double this year to $1 billion. Some go as far as saying consumption of e-cigs could surpass consumption of traditional cigarettes in the next decade.
Lorillard CEO Murray Kessler on Wednesday estimated that e-cigarettes drove total industry cigarette volumes down about 600 million cigarettes, or about 1 percent, during the first quarter, excluding Internet sales â¿¿ a major avenue for e-cig purchases.
Altria said Thursday its cigarette volumes fell about 5 percent to 29.7 billion cigarettes compared with a year ago. Volumes for discount cigarette brands like L&M increased nearly 6 percent, Marlboro volumes fell more than 5 percent and volume for its other premium brands fell by more than 12 percent.
The Richmond, Va., company's share of the U.S. retail market rose 0.5 percentage points to 50.5 percent. The premium Marlboro brand gained 0.2 percentage points to end up with 43.6 percent of the U.S. market.Marlboro has been under pressure from competitors and lower-priced cigarette brands as consumers face economic pressure and high unemployment. The company has introduced several new products with the Marlboro brand, often with lower promotional pricing. Altria's first-quarter profit rose about 16 percent as it commanded higher prices for its cigarettes and smokeless tobacco and it benefited from adjustments to a longstanding legal settlement. It earned $1.38 billion, or 69 cents per share, for the period ended March 31, up from $1.19 billion, or 59 cents a share, a year ago. Its adjusted earnings of 54 cents per share beat Wall Street expectations by a penny as it excluded a benefit from credits for disputed payments under the 1998 multistate tobacco settlement. Revenue, excluding excise taxes, decreased slightly to $3.97 billion. Analysts polled by FactSet expected $4.03 billion.