April 30 (Reuters) – Altria beat Wall Street expectations for first-quarter profit and revenue on Thursday, as the Marlboro-maker slowed market share losses and pushed further into discount cigarettes.
Shares of the company were up about 7% in early trading, offering a smooth send-off for CEO Billy Gifford due to step down in mid-May.
In the final years of his tenure, Altria’s tobacco business, including the pricier Marlboro, has lost market share to discount brands as costs of living soared.
Investors welcomed a slowdown in Marlboro’s losses and a boost from Altria’s own cheaper labels such as Basic.
Gifford said pressures on consumer income, such as higher gas prices due to the Iran war, were driving growth in cheaper cigarettes.
A boom in the popularity of vapes, often sold without the permission of U.S. regulators, has also hurt the company. Altria said on Thursday this pressure was moderating.
A “BIG BEAT”
The company’s “big beat” versus forecasts was encouraging, Simon Hales, analyst at Citi, wrote in a note, adding that cigarette volumes were well ahead of expectations.
Altria also grew revenue by hiking prices of both cigarettes and oral tobacco products like nicotine pouch label On!.
At the same time, it has shifted into contract manufacturing for overseas players in order to grow its exports and benefit from related tax rebates – a move that also gave its quarterly performance a boost.
The company reported revenue of $5.43 billion for the quarter ended March 31, beating analysts’ average estimate of $4.58 billion, according to data compiled by LSEG.
Adjusted quarterly profit of $1.32 per share also topped expectations of $1.25.
(Reporting by Neil J Kanatt in Bengaluru and Emma Rumney in London; Editing by Shreya Biswas)
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