Altria Group Inc. reported a better-than-expected 5.2% sales
increase in the first quarter as cigarette shipment volumes
improved.
Results beat Wall Street expectations.
The largest U.S. tobacco company said Thursday that its
cigarette shipments grew 1.6% from the year-earlier quarter,
compared with 3% to 4% declines in recent years. The shipment
volume of total smokable products also increased 1.6%.
Smokers typically earn less than the average American and were
disproportionately affected by the recent recession and slow
recovery.
At the same time, alternative products like e-cigarettes have
been less of a drag than some industry observers predicted. Altria
estimated the market for battery-powered devices that heat liquid
nicotine grew by 50% to $2 billion in sales last year, less than
its estimated 160% increase in 2013. It still represents a small
slice of the $100 billion U.S. tobacco industry.
Overall, revenue at Altria, which also sells smokeless tobacco
products and wine, rose 5.2% to $5.8 billion from $5.52 billion a
year earlier. Earnings increased 13% to $1.02 billion from $1.18
billion in the year-earlier quarter. Per-share earnings fell to 52
cents from 59 cents in the year-earlier period.
Excluding restructuring costs and other special items, per-share
earnings were 63 cents, up from 57 cents last year.
Analysts had expected per-share earnings of 62 cents on revenue
of $4.13 billion.
Company volumes of other smokeless products, mostly moist snuff,
grew 2.7% in the first quarter.
Earlier this month, rival Reynolds American Inc. said its
revenue grew 6.3% in the March quarter because of higher pricing
that offset declining volumes. Lorillard Inc., which is in the
process of being acquired by Reynolds, posted a 4.8% sales
increase.
Shares of Altria have been up 6% this year through Wednesday's
close.
Write to Angela Chen at angela.chen@wsj.com
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