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Marlboro Cigarettes, a product of Philip Morris International
Daniel Acker | Bloomberg | Getty Images
After years of accelerated decline in smoking, tobacco giant Altria said it saw a trend reversal, with US cigarette volumes flat across the industry from the previous year.
However, the company declined to provide a prediction on how things would turn out in 2021 as it is unclear whether the factors that contributed to this trend will continue.
The pandemic has brought more people locked inside their homes, giving smokers more opportunities to take a break from their hectic days and light up more often, particularly amid global stress and anxiety higher due to the economy and the health crisis. Employees working from home were no longer in a smoke-free office and consumers generally had higher disposable income thanks to restrictions on other forms of entertainment like restaurants and bars, movie theaters and travel.
In the business of Altria, the trend was more pronounced. The Marlboro maker’s total cigarette shipments volume was down 0.4% from 2019 and up 3.1% in the fourth quarter. In comparison, Altria’s cigarette volume from 2018 to 2019 fell 7.3%.
Altria said she pays particular attention to trends that may influence future cigarette sales.
“Looking ahead, we predict that the volume trends of the cigarette industry in 2021 will be more influenced by the stay-at-home practices of smokers, unemployment rates, fiscal stimulus, inter-movement. -categories, timing and extent of COVID-19 vaccine deployment and post-vaccine consumer purchasing behavior, ”Altria said on a results conference call.
Faced with the expected drop in smoking, Altria has invested in alternatives to cigarettes such as its heated tobacco product iQos and its nicotine sachets.
Altria stock closed Thursday up 1.98% at $ 42.65. The stock has fallen nearly 15% in the past year, giving it a market value of $ 79.26 billion.
In 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 gained 99 cents per share, which was lower than analysts’ estimates. Revenue was better than expected, rising to $ 6.3 billion from $ 6 billion a year ago.
For 2021, the company expects to earn between $ 4.49 and $ 4.62 per share after adjustments.
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