

Smokeless Tobacco and Price Hikes Keep Margins Stable at Altria Group and Philip Morris
February 09, 2012 08:20 ET
Smokeless Tobacco and Price Hikes Keep Margins Stable at Altria Group and Philip Morris
Five Star Equities Provides Equity Research on Altria Group & Philip Morris
NEW YORK, NY--(Marketwire - Feb 9, 2012) - Tobacco stocks have been relatively flat in 2012 as the industry continues to negotiate strict regulations pushed by governments across the world. Tobacco manufacturers continue to focus more attention on their respective smokeless tobacco segments to offset the decline in cigarette demand. Thus far, this has benefitted margins industrywide. Five Star Equities examines investing opportunities in the tobacco industry and provides equity research on Altria Group, Inc. (
[ www.fivestarequities.com/MO ]
[ www.fivestarequities.com/PM ]
Global Industry Analytics, Inc. (GIA) recently issued a report, "Tobacco: A Global Outlook," arguing that dropping consumption of tobacco products across developed economies has prompted tobacco companies to augment their focus on developing markets, "which have been exhibiting positive trends." Moreover, GIA says that new Low Tar Cigarettes are expected to do well in the market with the industry being optimistic to "sail through" the disturbing phase.
Christopher Growe, an analyst at Stifel Nicolaus & Co. in St. Louis, recently told Bloomberg that he projects industrywide per-share earnings growth of 10 percent, helped by stronger demand for smokeless tobacco. In addition, Growe says U.S. cigarette makers will increase prices by about 15 cents a pack this year to mute shipment declines of about 3.5 percent.
Five Star Equities releases regular market updates on the tobacco industry so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us free at [ www.fivestarequities.com ] and get exclusive access to our numerous stock reports and industry newsletters.
When Marlboro manufacturer, Altria Group, reported fourth quarter earnings last month, the company reported that customers were increasingly moving to its discount brands and smokeless tobacco products in the face of price increases and smoking bans. Altria reported net income of $836 million, or 41 cents per share, for the three-month period ended Dec. 31, down from $919 million, or 44 cents a share, last year.
Volumes of its smokeless tobacco brands such as Copenhagen and Skoal increased about 10 percent. For the quarter, Altria's smokeless tobacco brands had 55.5 percent of the market.
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