Marlboro Maker’s Revenue Up Despite Lower Sales

Published on January 20th, 2015 00:00

Steady overall performance has been one of the long lasting features of Altria stock, as the cigarette giant's shares have sustained their gradual but stable march larger even in the face of complicated factors all through the industry. Coming into this morning's Q3 revenue report, Altria investors pondered whether the company could continue retaining its revenue increase in spite of obstacles in keeping sales upwards. However, Altria's report reassured worried shareholders, as the cigarette seller released better revenue per share figures than they had anticipated despite a small decline in sales.


Altria's Q3 final results demonstrate just how really hard the company has worked to earn the almost all of its possibilities in a challenging market environment for tobacco. Profits for the quarter in fact have fallen by 0.9%; however, Altria was able to get over those headwinds in order to create a moderate gain in net revenue. With the advantage of a lower share count caused by Altria's stock buyback program, revenue per share constituted $0.71, up a penny from previous year. Even after adapting for some one-time things, Altria's revenue per share were much better than the majority of investors had predicted.

Cigarette volumes dropped by 2.8%, as unit sales of discount cigarettes progressed at the cost of Marlboro and other premium cigarette brands. However, a boost in pricing for its smoking products outweighed the unit-sales headwinds, resulting in a 1% climb in net profits and an identical increase in operating company revenue after enabling for a one-time adjustment in the previous year in association with conflicts with nonparticipating producers. Significantly, better prices also increased margins for the segment, which came in higher by 2.5 percentage points from 2013 levels.

Although Altria is working with challenging disorders in the tobacco market, it is demonstrating a better result than the entire industry in holding onto its customers' loyalty. Market share among its major cigarette brands continues to be strong, with its smokeless category viewing entire market share of about 55.4%, up 0.3 percentage points from previous year figures. In the cigarette realm, Marlboro demonstrated a 0.1 point boost to 43.8%, and entire cigarette market share raised by 50.9% on the strength of profits in the discount industry. Therefore, Altria reiterated its whole year 2014 revenue guidance, with the company forecasting revenue of between $2.54 and $2.59 per share. That is properly in accordance with what investors mostly anticipate to see from the tobacco leader, as Altria is convinced that the Q4 will demonstrate much better revenue-per-share growth due to lower efficient tax rates and lower costs for its smokeable products message.