Marlboro Cigarettes, a product of Philip Morris International
Daniel Acker | Bloomberg | Getty Images
After years of accelerating the decline in smoking, tobacco giant Altria said it has seen a reversal of the trend, as US cigarette volumes were widespread in the industry compared to the previous year.
However, the company declined to provide a prediction on how things will shape in 2021, as it is unclear whether the factors that contributed to this trend will continue.
The pandemic has brought more people into their homes, giving smokers more opportunities to take a break from their hectic days and light up more often, especially amid higher levels of stress and anxiety due to the economy and health crisis. Employees working from home were no longer in a smoke-free office, and consumers generally had more income available from restrictions on other forms of entertainment, such as restaurants and bars, cinemas and travel.
In Altria’s own business, the trend was more pronounced. The total volume of cigarette shipments for the Marlboro manufacturer decreased by 0.4% compared to 2019 and increased by 3.1% in the fourth quarter. By comparison, the volume of Altria cigarettes from 2018 to 2019 decreased by 7.3%.
Altria said she pays close attention to trends that could influence future cigarette sales.
“Looking to the future, we expect the volume trends of the cigarette industry in 2021 to be most influenced by smokers’ home stay practices, unemployment rates, fiscal incentive, movement by category, timing and extent of implementation of the VOCID vaccine. 19 and the buying behavior of vaccine consumers, “Altria said in a earnings conference call.
Faced with the expected drop in smoking, Altria has invested in alternatives to cigarettes, such as its heated iQos tobacco product and nicotine bags.
Altria shares closed 1.98% at $ 42.65 on Thursday. The stock has fallen by almost 15% in the last 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. Except for the articles, Altria earned 99 cents per share, which was below 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.