Altria eyes investments in cigarette alternatives, beats revenue estimates
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Marlboro maker Altria Group Inc beat estimates for fourth-quarter revenue on Thursday and said it would invest a portion of profits from its booming cigarettes business into developing and marketing oral tobacco and heated tobacco products this year.
The company's shares rose 3% after it also announced a $2 billion share buyback.
Tobacco companies are pouring tens of millions of dollars into developing alternative products in a bid to scrub their image as purveyors of cancer-causing cigarettes by introducing new heated-tobacco products and nicotine pouches.
"It is about driving investments there, driving awareness, getting the distribution we desire at retail and having it in the consumers' consideration," Chief Executive Officer William Gifford said on an earnings call.
The Black & Mild cigars maker forecast 2021 adjusted profit between $4.49 and $4.62 per share, implying a jump of up to 6%, but lower than the Refinitiv IBES estimate of $4.63.
Revenues net of excise taxes increased 5.3% to $5.06 billion in the fourth quarter ended Dec. 31, beating the $5.01 billion estimate set by analysts.
Altria also said it recorded a non-cash pre-tax unrealized gain of $100 million from an increase in fair value of its investment in e-cigarette maker Juul, having previously taken over $11 billion in write-downs on its investment.
