Altria Group Inc., the maker of major cigarette brands such as Marlboro, Benson & Hedges, and Virginia Slims, posted impressive fourth quarter results. Its profit for the quarter doubled, driven by higher cigarette prices and lower costs for paying debt.
The American multinational corporation, based in Henrico County, Virginia, United States of America, is the parent company of Philip Morris USA, John Middleton, Inc., U.S. Smokeless Tobacco Company, Inc., Philip Morris Capital Corporation, and Chateau Ste.
The company announced on Friday that the number of shipments fell 2 percent to over 31 billion cigarettes, however, its share of the US market increased by 0.1 percent up to 50.9 percent.
Higher prices helped push Altria’s revenue up by around 5 percent to $4.61 billion, excluding excise taxes. According to a Zacks Investment Research poll, analysts expected $4.51 billion.
Altria posted earnings of $1.24 billion (63 cents per share) in the last quarter, an increase from $488 million (24 cents a share) the year before. Earnings were slightly below what analysts had forecast of 66 cents per share.
On Friday the company announced that its president and chief operating officer, Dave Beran, is going to be retiring in March after working at the company for 38 years. CEO Marty Barrington will become president, current CFO Howard Williard will become COO, while William Gifford will become the company’s new CFO.
“We’ve been cautious for the last several years as you know, as we went through this difficult recession,” Barrington said in a conference call with investors. “Our view is that the adult tobacco consumer is feeling better about their economic situation and their economic future and we expect some modest improvement in that over 2015.”
Altria’s Marlboro brand has been under increasing pressure from competitors with lower-prices cigarettes, in addition to tax hikes and smoking bans. The brand sold for an average of $6.02 per pack during the fourth quarter, compared to an average of $4.55 per pack for the cheapest brand.
Altria is focusing on other alternatives though, such as electronic cigarettes, given that there is expected to be a big decline in cigarette smoking.
For fiscal 2014 Altria posted earnings of $5.07 billion ($2.56 per share), up from $4.53 billion($1.64 per share) the year before. Revenue increased by 2 percent to $17.9 billion and its US retail share gained 0.2 percentage points to 50.9 percent.