Shares of Altria fell on Thursday after the tobacco giant reported flat earnings, driven by declining cigarette sales and stiff competition in the nicotine pouch market. The Richmond, Virginia-based company posted a 2% drop in fourth-quarter revenue to $5.8 billion, largely due to lower cigarette sales.
Altria CEO Billy Gifford cited the impact of unauthorised disposable e-cigarettes, often cheaper and available in fruit and candy flavours, as a factor squeezing cigarette sales. “We have long advocated for stronger enforcement against illicit products,” Gifford said.
The company reported adjusted net income of $1.30 per share, missing Wall Street expectations of $1.32 per share, according to Zacks Investment Research. Altria’s nicotine pouch brand, on! Plus, saw its market share shrink to about 13%, down five percentage points from the prior year, as it faces fierce competition from Philip Morris International’s Zyn, which dominates over two-thirds of the market.
Altria executives noted pricing pressure from Philip Morris, including 2-for-1 promotions for Zyn. Gifford outlined plans for introductory price promotions as the company expands on! Plus nationally following FDA authorisation in December. The company also suffered a setback in the e-cigarette space after a trade ruling blocked imports and sales of its NJOY Ace products due to patent infringement.
Despite challenges, Altria’s adjusted revenue of $5.08 billion topped forecasts of $5 billion. The company expects full-year earnings of $5.56 to $5.72 per share.
