Philip Morris faces sales volume pressure

Published on September 13th, 2011 12:53

Philip Morris USA’s internal tobacco shipment volume within the three months to the end of June, at 36.2 billion, constituted 0.7 % on that of the second quarter of 2010, the company’s representative said.

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Marlboro volume at 31.6 billion, increased by 1.1% but the volume of the other premium brands dropped by 7.8% to 2.5 billion and the volume of its lower priced brands decreased by 15.5% to 2.1 billion. Meanwhile, PM USA’s volume within the six months at 68.1 billion was down by 3.5 %. Philip Morris informed that after adjusting volume figures, firstly for changes in business stocks, its volumes during the second quarter and first half of 2011 were down by approximately 4.5 % and 5.0 % respectively. These data can be compared with an estimated 3.5 % decrease that the US cigarette producer faced within both first and second quarters.

PM USA’s share of the US tobacco market during the second quarter of 2011, at 49.3%, was lower by 0.9 of a basis point, while its share within the first six months, at 49.1 % dropped by 1.1%. Marlboro’s market share decrease by 0.2 of a basis point to 42.6 % within the second quarter and fell by 0.3 to 42.4% within the first six months.

Altria’s spokesman declared that company’s net profit in the second quarter and first half of the 2011 decreased by 5.6 % to $5.9 billion and 3.9 % to $11.6 billion, respectively, mostly due to lowered net profits from financial services. Profit net of excise duties in the second quarter and first half of 2011 dropped 7.8% to $4.0 billion and 4.2% to $7.9 billion. Altria’s announced diluted profits per share in the second quarter and first half of 2011 dropped 58.0 % and 25.8 %, respectively, mostly due to one-time leveraged lease charge, partially compensated by higher operating company income from tobacco products, which comprised lower impairment of assets, integration and higher gainings from Altria’s equity investment in SABMiller.

Remarking on the second quarter and half year results, Michael E. Szymanczyk, spokesman and CEO, declared that the company had proceed to demonstrate strong adjusted profits per share increase in the second part of 2011. “Our profits per share increase reflect a solid operating income margin and retail share performance of our tobacco enterprises’ premium brands. For instance, Marlboro realized a strong successive retail share increase,” he declared. “Altria proceeded to reward its shareholders by means of dividends and its corporate repurchase program. Altria already repurchased about 22.8 million shares and paid approximately $1.6 billion in dividends in the first quarter of 2011. We hope that our business will achieve the 2011 full-year reported and adjusted diluted profit per share plan,” Mr. Szymanczyk concluded.

By Joanna Johnson, Staff Writer. Copyright © 2011 TobaccoPub.com. All rights reserved.


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