Marlboro maker Altria Group Inc. said Thursday that its first-quarter profit rose almost 4 per cent as higher prices and cost-cutting helped offset declines in cigarette volumes.
The owner of the nation's biggest cigarette maker reported net income of $973 million, or 48 cents per share, for the three-month period ended March 31, up from $937 million, or 45 cents a share, a year earlier.
Adjusted earnings were 49 cents per share. That matched analyst estimates, according to a survey by FactSet.
Revenue, excluding excise taxes, rose about 1 per cent to $3.99 billion. Analysts polled by FactSet expected revenue of $4.01 billion.
Its shares rose 20 cents to $31.89 in premarket trading. Its shares have been trading near their 52-week high of $32.10 and traded as low as $23.20 over the past year.
Richmond, Va.-based Altria said cigarettes volumes fell 2.6 per cent to 31.1 billion cigarettes compared with a year ago as an increase of nearly 18 per cent in its discount cigarette brands offset declines in its premium brands like Marlboro.
Its top-selling Marlboro brand gained 0.1 points of market share to end up with 42.3 per cent of the U.S. market. Marlboro volumes declined 3.4 per cent.
The company has introduced several new products with the Marlboro brand, often with lower promotional pricing. They include special blends of both menthol and non-menthol cigarettes to try to keep the brand growing and steal smokers from its competitors.
Altria still faces pressure in the current economy from less-expensive brands such as Pall Mall from Reynolds American Inc. and Maverick from Lorillard Inc.
Like other tobacco companies, Altria is focusing on cigarette alternatives, such as cigars, snuff and chewing tobacco, for future sales growth because the decline in cigarette smoking is expected to continue.