Altria Group (
MO) recently reported strong second-quarter results, as adjusted earnings increased 8.7% to 50 cents from 46 cents in the prior-year quarter, primarily driven by the smokeless tobacco category.
Net revenues increased 33% year-over-year to $6.7 billion, driven by cigarette segment results that increased 22.5%. The company was able to pass on the increase in federal taxes by raising prices, which, in turn, raised segment revenue. The acquisition of UST and cigars (up 16.8%) also contributed favorably to the top line.
Total industry cigarette shipments declined 7%, as expected, while cigarette shipments for the company declined 10.4% after adjustments in trade inventories and calendar differences. Volume for the company's core brand Marlboro also declined 5.7% and its market share declined 0.6 points. Competitors stepped up promotional activity in April and May, widening the price gap between Marlboro and the lowest priced brands by about 50%. Virginia Slims, Parliament, and
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