By Tripp Mickle
Altria Group Inc. is scheduled to announce its second quarter
earnings before the market opens Wednesday. Here's what you need to
know:
EARNINGS FORECAST: Net income of 71 cents a share is the
consensus of analysts surveyed by Thomson Reuters, compared with 64
cents reported a year earlier.
REVENUE FORECAST: Revenue of $4.75 billion is forecast, compared
with $3.97 billion reported for the period a year earlier.
WHAT TO WATCH:
--Marlboro Country: The nation's top-selling cigarette brand
continues to drive Altria's business. An improving economy boosted
Marlboro sales and helped Altria increase cigarette shipment
volumes in the second quarter by 1.6%, bucking the typical
quarterly decline of about 4%. Analysts expected that momentum to
continue in the second quarter.
--Rising Competition: Reynolds American's $25 billion
acquisition of Lorillard Inc. means two companies now control more
than 80% of the $100 billion U.S. tobacco market. The consolidation
gives Altria, which has an estimated 47% share, more pricing power
than it previously enjoyed. But it also faces more competition with
Reynolds now owning Newport, the second-largest cigarette. What it
plans to do with pricing and how it plans to counter Reynolds will
be important in the coming months.
--Off the Mark: Altria moved into the vapor industry more
hesitantly than its competitors. Its MarkTen brand lags far behind
Reynolds' Vuse and Imperial Tobacco Group PLC's Blu e-cigarettes.
The company said in June it plans to use different promotions
behind MarkTen and Green Smoke e-cigarettes to determine which
products and promotions appeal to consumers. With the vapor
industry projected to become a $3.5 billion business, Altria
continues to take slow steps forward.
Write to Tripp Mickle at Tripp.Mickle@wsj.com
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