Marlboro cigarettes, a product of Philip Morris International
Daniel Acker | Bloomberg | Getty Images
After years of accelerated smoking decline, tobacco giant Altria said it saw a reversal in the trend, as U.S. cigarette volumes have been stable across the industry compared to the previous year.
However, the company declined to provide a forecast on how things would develop in 2021 because it is unclear whether the factors that contributed to this trend would continue.
The pandemic has brought more people hiding inside their homes, giving smokers more opportunities to take a break from their busy days and smoke more often, especially amid higher general levels of stress and anxiety due to the economy and the health crisis . Employees working from home were no longer in a smoke-free office and consumers generally had more disposable income with 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 to the Marlboro maker fell 0.4% from 2019 and increased 3.1% in the fourth quarter. By comparison, the volume of Altria cigarettes from 2018 to 2019 fell 7.3%.
Altria said she is paying close attention to trends that may influence future cigarette sales.
“Looking to the future, we expect the 2021 cigarette industry volume trends to be more influenced by smokers’ stay at home practices, unemployment rates, fiscal stimulus, cross-category movement, the timing and breadth of implantation. COVID-19 vaccine and consumer buying behavior after the vaccine, “Altria said in a conference call.
Faced with the expected drop in smoking, Altria has invested in alternatives to cigarettes, such as its heated tobacco products iQos and nicotine bags.
Altria’s stock closed Thursday with a 1.98% rise to $ 42.65. The shares fell nearly 15% last year, giving them a market value of $ 79.26 billion.
In the fourth quarter, the company posted a net profit 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 a share, which was below analysts’ estimates. Revenue was better than expected, rising from $ 6 billion a year ago to $ 6.3 billion.
For 2021, the company expects to earn between $ 4.49 and $ 4.62 per share after adjustments.