Altria slides after forecasting plunging cigarette shipments
Altria Group Inc., 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. The Richmond, Virginia-based company’s cigarette shipments plummeted 14.3-percent in the first quarter, after a 4.4-per- cent slide the previous period, mirroring a wider industry trend toward alternative products. The faster pace of decline signals the largest tobacco company in the United States may need to ramp up its investments in other product lines. It now expects industry-wide cigarette sales to fall between four per cent and five per cent this year, compared to the wider 3.5 per cent to five per cent range it had forecast at the start of the year. Altria has been working to shift its business away from traditional tobacco products. The U.S. smoking rate has been falling for decades amid smoking bans, higher taxes and public health efforts urging smokers to quit and discouraging young people from ever starting. 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 Inc.’s IQOS cigarette-alternative in the U.S., 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 Inc., which has a vaping device that some see as a competing product.