Highlights of Altria’s 4Q Revenues Report

Altria Group Inc Chief Executive Officer, Michael E. Szymanczyk declared that the company’s tobacco divisions have showed a strong performance in all tobacco market segments, while Marlboro kept its overwhelming leadership position and even boosted it.

Two weeks ago, Altria published its 4Q revenues report and acknowledged that cuts in operating expense and high sales of smokeless tobacco brands contributed to a 7-percent growth in fourth-quarter earnings, though the company reported of drops in cigarette sales.

Altria’s CEO said cigarette sales lost 11.4 percent in the last quarter of 2009 in comparison to identical period last year. The company analysts considered that overall sales decline across the industry would reach 10 percents in the fourth quarter.

Philip Morris USA faced sale drops in all strategic cigarette brands, like cigarettes online buy. Even flagship brand, Marlboro, has not avoided share drops, as it lost 0.4 percent market share, falling from 42.1 in the 3Q percent to 41.7.

As regards Altria’s overall share in the nationwide market, it sank to 49.4 percent in the fourth quarter down from 50.9 percent in 2008.

smoking

smoking

The company as well hiked the prices on almost all cigarette brands, what resulted in the loss of market share, since key rivals Reynolds American and Lorillard introduced several promotional drives for their major brands.

Altria’s smokeless division, UST, reported of a spectacular performance by Copenhagen snuff, since it gained 1.5 percent to its share in the fourth-quarter, primarily due to the introduction of wintergreen long-cut version.

As regards another major smokeless brand, Skoal, it also demonstrated relatively solid performance, in comparison to rival brands, which appeared to be affected by Copenhagen’s latest extension. These two products are attempting to catch up with Grizzly Snuff – the best selling moist snuff product across the USA, manufactured by Reynolds American’s subdivision.

In order to benefit from the impressive launch of Copenhagen wintergreen, Altria plans launching more additions to Copenhagen portfolio in the nearest future. Scoal will also concentrate efforts on boosting its performance in the smokeless category, which is regarded as the future of tobacco industry.

Moreover, the Company declared it intends to launch Marlboro Snus to nationwide market in to months. This innovative product was on several test-markets across the US and got a nice feedback from target consumers. Whereas experts agree in opinion that cigarette market is one step from extinction, they consider that smokeless tobacco will bring huge profits for the manufacturers in the nearest future.

In cigar category, Altria as well performed strongly, as Black & Mild, its flagship cigar brand won 1.3 points to its 2008 market share, though sale volumes lost 3.6 from 2008 result.

Michael E. Szymanczyk admitted that they anticipate an unstable business environment in 2010, since cigarette sales would continue sinking. He said that in this situation they have no option, but laying off more people, to compensate the losses.

Leave a Reply