Marlboro Cigarettes, a product of Philip Morris International
Daniel Acker | Bloomberg | Getty Images
After years of rapid decline in smoking, tobacco giant Altria said it sees a reversal in the trend as U.S. cigarette volumes in the industry were wide compared to the previous year.
However, the company did not want to make predictions about how business would shape in 2021, as it is unclear whether the factors that contributed to this trend would continue.
The pandemic has led to the increase in more people in their homes, giving smokers more opportunities to take a break from their hectic days and come to light more frequently, especially amid the higher stress and anxiety levels due to the economy and the health crisis. Employees working at home were no longer in a non-smoking office and consumers generally had more disposable income from restrictions on other forms of entertainment, such as restaurants and bars, movie theaters, and travel.
In Altria’s own business, the trend was more apparent. The total shipping volume for the Marlboro manufacturer decreased by 0.4% from 2019, and by 3.1% in the fourth quarter. In comparison, Altria’s cigarette volume fell by 7.3% from 2018 to 2019.
Altria said they are 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 most affected by stay-at-home practices, unemployment rates, fiscal stimulus, movement in different categories, the timing and breadth of COVID-19 vaccine deployment and the purchase of consumers according to the vaccine, “Altria said in a conference call on earnings.
In light of the expected decline in smoking, Altria has invested in alternatives to cigarettes such as the heated tobacco product iQos and nicotine bags.
Altria shares rose 1.98% on Thursday to $ 42.65. The stock has fallen by almost 15% in the past year, giving a market value of $ 79.26 billion.
In the fourth quarter, the company had a 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 lower than analysts. Revenue was better than expected, rising to $ 6.3 billion from $ 6 billion a year ago.
For 2021, the company expects to earn $ 4.49 to $ 4.62 per share after adjustments.