Tag Archives: Marlboro
Major rivals likely to follow PM USA steps shortly
Philip Morris USA, the leading cigarette maker in the USA, owned by Altria Group, is set to complete a six cent price increase per pack of all of its cigarette brands, the second time the tobacco giant has raised its price list this year, reported Dow Jones.
Last week Altria Group, parent company of the leading cigarette maker in the USA, Philip Morris, revealed its financial report for the third quarter of the year. The company reported revenue added 2.2% on the year-over-year basis, equaling $6.2 billion and significantly surpassing consensus estimates. Adjusted earnings grew by 3.2% to post $0.58 per share, nearly in-line with anticipated results.
The company had to pay a heavy charge of $874 million to settle early debt extinguishment, and in addition it benefited from inexpensive interest rates, releasing $1.9 billion of 2.85% unsecured notes to be paid in 2022 and further $900 million in 4.25% unsecured notes to be paid in 2042. Analysts believe the given capital could be directed to buy back shares, since the company approved a supplemental $500 million for its share buyback plan.
Although experts think Altria shares are valued at a fair basis, anti-smoking measures hinder possibly accretive spending on promotion and marketing, while according to experts, dividends and share repurchase are the best way for Altria to provide shareholder value.
In its quest to keep on sales growth of its top-selling Pall Mall brand of cigarettes, RJ Reynolds is releasing the brand new menthol-flavored varieties.
The second-largest tobacco company in the U.S. has introduced Pall Mall White and Pall Mall Black as support version for Pall Mall Green, its iconic menthol style.
Richard Smith, communications manager for RJ Reynolds declared the black style gives smokers “a full-flavor smoke,” while the white style “provides a milder smoke.”
Smith mentioned that the latest are launched in the tobacco shops throughout the nation, with countrywide release planned for October.
In accordance with RJ Reynolds, the latest menthol-flavored styles are released to live up to the changing preferences of adult smokers and make the most of the momentum in the menthol segment of the market.
“We think Pall Mall grew to be the proper product launched at the proper time, due to the fact the tough economy continues to post a negative impact on purchasing capability of adult tobacco consumers,” Smith added.
Malaysia is set to adopt a law, which will successfully ban all promotional prices and discounts on cigarettes, trying to discourage tobacco use, Richard James, director of corporate affairs at Philip Morris Malaysia revealed.
At present, tobacco companies operating in Malaysia, are allowed to provide 5% discounts during one month, not more than 3 times a year. Such offers are usually carried out during the launch of new products.
According to Mr. James, Philip Morris International Malaysia, which manufactures Marlboro, Parliament and L&M cigarettes, is not opposing the new initiative by Malaysian Ministry of Health, since tobacco companies were notified about the measure.
Federal court of Appeals upheld a ruling prohibiting the federal government from obliging cigarette manufacturers to place grievous health warning labels on cigarette packs depicting severe health complications associated with smoking.
Last Friday, the U.S. Court of Appeals confirmed the previous decision that federal government’s requirement violates commercial free speech protection, granted by the First Amendment, with a 2-1 vote. The court dismissed the requirement and requested that the Food and Drug Administration draft new warnings.
Several of the nation’s leading tobacco groups, led by R.J. Reynolds Tobacco Co., contested the requirement to modify health warnings to depict the health risks related to smoking and promote smoking cessation. The companies argued that the new warnings overstepped factual information turning into anti-smoking banners. The FDA claimed that images of dead corpse and rotten teeth and gums are factual.
The nine health warning labels developed by the FDA encompass image of a man exhaling tobacco smoke using a hole in the throat, and other grueling, scary images, which accompanied by statements saying that smoking results in cancer and other diseases. The labels were set to cover a half of pack, and provide the Quitline number.
The court ruled that the case gives raise to “unexplored questions about the frames of the federal government’s authority to oblige the maker of a product to step over from providing only factual and precise commercial information and undermine its own commercial interest – in the given case, by turning ‘every cigarette pack selling across the country into billboard’ for the federal government’s anti-smoking advertisements.”
A downturn in global business activity is hurting U.S.-based companies, which are reporting the worst business results throughout the last decade. Many leading companies have recently announced lower profits and reduced revenue expectations, and the slowdown in European Union is cited as a key reason for these forecasts. Among the business giants to issue warning estimates are FedEx, PMI and Pepsi.
This demonstrates that it might be wiser for analysts to underweight multinational companies, inclined to business activity in Europe. The stocks of the largest tobacco companies have also being hit by the latter scenario, which is prompting more experts to lower expectations from Philip Morris International, while raising Altria Group instead.
–The latest buyback strategy of Philip Morris is intended to return more funds to the company’s shareholders.
–Solid Performance in Asian markets has led to the sales growth for the tobacco company, contributing to revenues boost in the last quarters.
–Investors have showed increasing interest in tobacco stocks thanks to beneficial share repurchase programs and dividend yields.
Last week, Philip Morris International announced its newest three-year share buyback strategy, equaling $18 billion, as the world’s leading tobacco group intends to provide more return funds to its shareholders.
If you are a fan of Marlboro, Camel, or any other famous cigarette brands, imported to India, you should better start stocking up, as Indian government is currently debating over possible restrictions on the importations of tobacco products and a total ban on foreign presence in wholesale sales of cigarettes and other tobacco products.
The measure is considered two years after India’s authorities prohibited direct investment of foreign companies into cigarette production industry.
Local Department of Finance has sent a letter to the Ministry of Commerce asking it to consider implementing restrictions on imports of cigarettes in the latest foreign trade legislation.
Currently many cigarette smokers are getting more interested in trying various tobacco products besides cigarettes, than previous generations of smokers, and Altria Group Inc, parent company of the largest cigarette maker, Philip Morris USA, is looking on their recently-launched products to lure customers who are open to new products, according to the company.
The corporation, best-known for marketing the iconic Marlboro cigarettes, as well supported its profit forecast, published in January.
Altria, which also markets Copehnagen and Scoal smoke-free tobacco products and Black & Mild cigars, has witnessed a change in tobacco consumption patterns in the USA. Whereas the rate of cigar and cigarette smokers has been virtually unchanged, the consumption of smokeless tobacco has been growing.
Nevertheless, Marlboro – with roughly 42 percent share of the U.S. cigarette market – remains the leading brand in the group’s portfolio.
At the same time, many smokers have admitted to be trying new “reduced-risk” tobacco products, like snus and other smoke-free tobacco, due to health growing concerns and social stigma.
On the threshold of the annual financial report, presented by Altria Group, owner of Philip Morris USA, leading industry analysts forecast its performance during the fourth quarter of the year, basing on its Q3 results.
Since adult Americans reduce their expenses on tobacco products, due to growing taxes, and increasing social stigma on smoking, the largest cigarette maker in the United States reported drop in shipping volumes, but confirmed it still managed to obtain revenue growth through increase of organic cigarette prices during its earning conference pre-call.
Industry experts predicted that the company’s leading brand, Marlboro could retain its market share, thanks to the recently introduced Marlboro Leadership Price, though the brand has lost 1% of market share in the previous quarter, totaling 41.7% of the US cigarette market. In addition, the market share of its other key brands, including Parliament and Virginia Slims, went down as well.
The drops in Marlboro market share affected the overall number of cigarettes sold by the company during the quarter, which dropped by 9% to equal 33.3 billion cigarettes versus the same period a year before. Yet, Philip Morris USA’s discount cigarette brands, including L&M were up by 9.5%.