Marlboro cigarettes, a product of Philip Morris International
Daniel Acker | Bloomberg | Getty Images
After years of accelerating smoking decline, tobacco giant Altria announced a trend reversal as U.S. cigarette volumes remained unchanged year over year across the industry.
However, the company declined to predict how things would play out in 2021, as it is unclear whether the factors that contributed to this trend would continue.
The pandemic brought more people into their homes, giving smokers more opportunities to take a break from their hectic days and glow more often, especially given the overall higher levels of stress and anxiety due to the economy and health crisis. Employees who worked from home were no longer in a smoke-free office, and consumers generally had more disposable income from restrictions on other forms of entertainment such as restaurants and bars, movie theaters, and travel.
The trend was more pronounced in Altria’s own store. The Marlboro maker’s total cigarette shipping volume declined 0.4% from 2019 and rose 3.1% in the fourth quarter. For comparison: Altria’s cigarette volume decreased by 7.3% from 2018 to 2019.
Altria said it is paying close attention to trends that could affect future cigarette sales.
“Looking ahead, we expect the volume trends in the cigarette industry in 2021 to be driven most by home smoker practices, unemployment rates, tax incentives, cross-category movements, timing and breadth of COVID-19 use – Vaccines and consumer purchasing behavior following vaccine will be affected, “Altria said on a conference call on revenue.
With the expected decline in smoking, Altria has invested in alternatives to cigarettes such as the heated tobacco product iQos and nicotine pouches.
Altria shares closed Thursday at $ 42.65, up 1.98%. The stock is down nearly 15% over the past year for a market value of $ 79.26 billion.
For the fourth quarter, the company reported net income of $ 1.92 billion, or $ 1.03 per share, compared to a loss of $ 1.81 billion a year ago. Excluding items, Altria earned 99 cents per share, which was below analyst estimates. Revenue was better than expected, increasing to $ 6.3 billion from $ 6 billion a year ago.
For 2021, after adjustments, the company expects earnings of $ 4.49 to $ 4.62 per share.
