RICHMOND, Virginia (AP) — Altria Group Inc.’s first-quarter profit dropped 15 percent as the Marlboro maker sold fewer cigarettes and its year-ago results benefited lower expenses from a longstanding legal settlement.
The owner of America’s biggest cigarette maker, Philip Morris USA, posted earnings Thursday of $1.17 billion, or 59 cents per share. That’s down from $1.38 billion, or 69 cents a share, in the year-ago period when it recorded more credits for disputed payments under the 1998 multistate tobacco settlement.
Excluding one-time items, earnings were 57 cents per share, matching Wall Street expectations.
Altria, based in Richmond, Virginia, said that revenue, excluding excise taxes, increased less than a percent to $4.01 billion as higher prices helped offset a decline in volumes. Analysts polled by FactSet expected $4.03 billion.
Its shares edged up 9 cents to $38.40 on premarket trading about 90 minutes ahead of the market opening.
Cigarette shipments fell 2.5 percent to 29 billion cigarettes. Adjusting for trade inventory changes, cigarette volumes fell 3.5 percent, compared with the total industry decline of about 4 percent.
Volumes of its premium Marlboro brand fell more than 2 percent but its share of the retail U.S. market rose 0.2 percentage points to 43.8 percent. The company’s share of the U.S. retail market rose 0.2 percentage points to 50.7 percent.
The Marlboro brand has been under pressure from competitors and lower-priced cigarette brands amid economic uncertainty and high unemployment.
That’s on top of the tax hikes, smoking bans and a social stigma that have made the cigarette business tougher.
Altria and others are focusing on cigarette alternatives — such as electronic cigarettes, cigars, snuff and chewing tobacco — for future sales growth because the decline in cigarette smoking is expected to continue.
Adjusted volumes for its smokeless tobacco brands such as Copenhagen and Skoal grew about 6 percent. Volumes for its Black & Mild cigars rose less than a percent.
Altria also owns a wine business, holds a voting stake in brewer SABMiller, and has a financial services
Michael Felberbaum can be reached at http://www.twitter.com/MLFelberbaum.