Altria Gains Market Share for Marlboro and L&M Cigarette Brands

May 25th, 2012 00:00
Marlboro and LM

Altria’s first quarter revenue increased 3.5% as the cigarette giant reduced costs and gained market share for Marlboro and L&M cigarette brands, helping to postpone weaker tobacco volume.

Altria, the manufacturer of best-selling Marlboro brand, has proceed to benefit from increasing interest is smokeless tobacco products as for instance Copenhagen, while sales of its cigarettes have been  mixed. Last year, the cigarette giant introduced to its stock more than 50 smokeless products, which are intended to keep smokers attracted to this category. First-quarter domestic cigarette shipment volume fall 2.3% due to trade stock patterns, better than the industry-wide 4% decrease as the producer of Marlboro cigarettes demonstrated retail-share gains. Marlboro’s volume dropped 3.5% and other premium smoking products decreased 9.4%, as about discount cigarettes they showed a 17.5% increase. Altria representative declared that after adjusting for trade stocks and an additional shipping day, cigarette volume was rather inactive from the previous year in comparison to the industry’s 2.4% drop when conducting those adjustments.

The cigarette industry tobacco volumes have been decreasing for years and a flat economy and increased unemployment continue to affect consumer available income. Reynolds American representatives recently declared that increased gasoline prices have caused particular problems to cigarette purchasing patterns. Altria announced revenue of $973 million, or 45 cents per share, higher from $937 million, or 43% a share in previous year. Except asset impairment, tax-related items and other adjustments, per share revenues increased to 47% from 44 cents. Company’s whole cigarette market share increased 0.3 percentage points to 49.4%, demonstrating gains by L&M and Marlboro. Altria started to ship Marlboro Black both menthol and non-menthol varieties last year.

Smokeless products volume fall 7%, as sudden 15% decrease for Skoal more than postponed Copenhagen’s growth. Altria introduced Skoal X-TRA and Skoal Snus in the first quarter though that brand’s increase has been moderated by the discontinuance of six items in the portfolio last year. Whole smokeless products market share finished the quarter at 55.5%, approximately 1 percentage point higher than the previous year. Altria spent $294 million to buyback 9.6 million shares at a mean price of $29.71 within the first quarter. The company has also a $378 million remaining in a $1 billion repurchase program that Altria plans to finalize by the end of the year. The company confirmed its full-year guidance, though Szymanczyk stated that Altria forecasts more modest adjusted-earnings increase through the middle quarters of the present year.

By Steve Shepherd, Staff Writer. Copyright © 2012 Cigarette-Store.biz. All rights reserved.

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