A tobacco stick for the iQOS electronic cigarette, which heats tobacco but doesn’t burn it. Altria markets iQOS in the U.S.
Fabrice Coffrini/AFP via Getty Images
Altria Group stock is falling as investors weigh a mixed first-quarter earnings report and confirmation that the government plans to tackle menthol in cigarettes.
Altria (ticker: MO) said it earned $1.42 billion, or 77 cents per share, down from 83 cents per share in the year-earlier period. On an adjusted basis, excluding nonrecurring items, earnings were $1.07 per share. Revenue fell 5.1% to $6.04 billion, but excluding excise taxes, the total was $4.88 billion. Analysts were looking for EPS of $1.05 a share and revenue of $4.98 billion.
Altria stock was down 2.5% to $46 in early trading. The shares are up more than 15% year to date and have risen 20.2% in the past 12 months.
The mixed earnings news, which contrasted with an upbeat report from Philip Morris International (PM) on April 20, came hours after the Biden administration said late Wednesday that it wants to ban menthol cigarettes.
While that may be a blow to tobacco companies, it isn’t a surprise. The proposal came from the Food and Drug Administration in late 2018 as part of an attempt by Scott Gottleib, commissioner at the time, to combat teen smoking. The White House was facing a deadline to decide whether to pursue the plan by the end of the month.
Reports circulated earlier this month that the administration was also considering looking to limit nicotine content, a proposal that also has its roots in the previous administration’s FDA.
Analysts have been fairly confident that any action would be a protracted process at a time when big tobacco firms are increasing looking to alternatives to traditional cigarettes for growth. Altria said Thursday it purchased the remaining 20% of the On! nicotine pouches company that it didn’t already own, its latest move to increase exposure to smokeless tobacco. The company first invested in On! In 2019.
Write to Teresa Rivas at [email protected]
