Marlboro maker Altria slides as cigarette sales keep falling | Fin24
 
  • Ace vs. SA Reserve Bank

    The ANC secretary general has again weighed in on the central bank's mandate.

  • Mandela Day

    Nationalisation, privatisation and land: What Mandela told business in 1990 still resonates today.

  • Fin24’s newsletter

    Sign up to receive Fin24's top news in your inbox every morning.

Loading...

Marlboro maker Altria slides as cigarette sales keep falling

Apr 25 2019 22:30
Tiffany Kary, Bloomberg

Altria Group, the Marlboro maker that’s been diversifying into cannabis and vaping, fell after reporting first-quarter results that disappointed Wall Street.

Revenue excluding excise taxes missed the lowest analyst estimate. It also said industry-wide cigarette volumes will keep falling this year.

Key insights

The company’s cigarette shipments plummeted 14.3% in the first quarter, after a 4.4% slide the previous period, mirroring a wider industry trend toward alternative products.

The faster pace of decline signals the company may need to ramp up its investments in other product lines. It now expects industry-wide cigarette sales to fall between 4% and 5% this year, compared to the wider 3.5% to 5% range it had forecast at the start of the year.

Further declines in cigarette sales could be ahead amid a growing movement to stop selling tobacco products to buyers under 21.

Altria has been waiting for federal approval to market Philip Morris International’s IQOS cigarette-alternative in the US, but it gave no new updates on that timeline Thursday. Altria has said it’s still committed to the deal, despite having taken a stake in Juul Labs, which has a vaping device that some see as a competing product.

Investors looking for more information have plenty of chances ahead: There’s an earnings call coming later this morning, plus an annual meeting slated for May 16.

Market reaction

Shares fell as much as 7.3% to $50.70 - the most intraday in three months. They’d gained about 11% this year through Wednesday’s close, shy of the S&P 500’s 18% rise.

cigarettes  |  results  |  companies
NEXT ON FIN24X

 
 
 
 

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...