WASHINGTON – Marlboro-maker Altria said Tuesday that cigarette sales continued to decline in its last quarter as the company pushed to expand sales of an alternative heated-tobacco product.
The Richmond, Virginia-based company reported second-quarter profit of $1.94 billion, or $1.04 per share, down 2.8% from the same period last year. Adjusted for one-time costs, the company would have earned $1.09 per share, better than the average Wall Street estimate of $1.06, according to Zacks Investment Research
The company said revenue fell 3.8% to $6.37 billion in the period. Adjusted revenue was $5.06 billion, which did not meet Street forecasts.
Sales were pressured by lower shipments of cigarettes, including brands like Marlboro and Parliament, which fell 8.8% through the end of June. Results were also hit by $50 million in charges related to business disruptions tied to COVID-19.
For 2020, Altria Group Inc. expects full-year earnings between $4.21 to $4.38 per share, representing growth ranging between 0% and 4%.
Altria has been working for years to shift more of its business away from traditional tobacco products amid steady declines. The company took a roughly $13 billion stake in beleaguered e-cigarette make Juul Labs, which has been hit by a wave of lawsuits and regulatory restrictions due to underage use of its high-nicotine vape pods.
Separately, Altria is expanding marketing of a heat-not-burn cigarette alternative, IQOS, to Charlotte, North Carolina, this month. The company said Tuesday it plans to expand marketing to four more cities over the next year and a half.
Earlier this month federal regulators said IQOS could be marketed to smokers as reducing their exposure to deadly chemicals contained in traditional cigarettes. The electronic IQOS device, which heats cigarette-like sticks of tobacco, is made by Philip Morris International and sold in the U.S. by Altria.