By Michael Calia
Altria Group Inc. posted higher revenue in the most recent
quarter as higher prices offset a decline in cigarette volume.
The company's earnings matched analysts' projections, while its
top line exceeded them.
Altria also said its operating chief, Dave Beran, would retire
March 1 after nearly four decades with the company. Finance chief
Howard Willard will take over for Mr. Beran, while strategy and
business development executive William Gifford will become the new
CFO, the company said.
The tobacco industry has been plagued by a decline in demand as
consumers opt to avoid smoking altogether or use smokeless
e-cigarettes, prompting cigarette makers to seek deals and boost
prices.
Altria, like the market and the rest of the cigarette industry,
is waiting to see how a large, complicated $25 billion deal to
merge Reynolds American Inc. and Lorillard Inc . plays out.
Reynolds American and Lorillard shareholders blessed the deal
Wednesday, but it still needs regulatory approval.
The combined company would have three of the top four cigarette
brands in the U.S., and its market share would grow to 34% from
24%. Altria, meanwhile, has the industry's top brand, Marlboro. In
the fourth quarter, Altria said it had a 50.9% retail share of the
cigarette market.
Altria said its total cigarette volume fell 1.7% in the most
recent quarter, and the Marlboro brand posted a 1.9% decrease.
The company's discount brands's volume rose 5.2%, and premium
brands other than Marlboro declined 7.5%.
Smokeable products' revenue, which excludes excise taxes, rose
3.3% to $3.91 billion.
Overall, Altria posted a profit of $1.24 billion, or 63 cents a
share, versus $488 million, or 24 cents a share, in the prior-year
period. The prior-year quarter included a $1.08 billion loss on
debt extinguishment.
Excluding certain items, per-share items were 66 cents.
Total revenue, excluding excise taxes, rose 4.7% to $4.61
billion.
Analysts had projected per-share earnings of 66 cents and
revenue of $4.54 billion, according to Thomson Reuters.
Shipment volumes for the company's smokeless products, including
chewing tobacco and e-cigarettes, rose 1%. The unit's revenue grew
4.1% to $428 million, excluding excise taxes.
Write to Michael Calia at michael.calia@wsj.com
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