Philip Morris USA has One of Worst Market Share Losses in History

The nation’s largest cigarette maker, Philip Morris USA (a.k.a. the Marlboro Man) had a more difficult time in the third quarter, marking one of the biggest U.S. market share declines for Altria Group’s (NYSE:MO) top-selling premium brand in at least four years. Higher prices and gains from its smokeless tobacco and cigar brands helped with a nearly 4 percent increase in its quarterly profit. In anticipation of an industry wide cigarette volume decline, Phillip Morris USA plans an additional $400 million in cost savings by the end of 2013.

Super Hot Feature: Your Cheat Sheet to the Money Gushing Tobacco Industry.

Altria (NYSE:MO) has introduced several new products with the Marlboro brand, often with lower promotional pricing, but the company still faces pressure in the current economy from less-expensive brands like Pall Mall from Reynolds American Inc. (NYSE:RAI) and Maverick from Lorillard Inc. (NYSE:LO). Altria (NYSE:MO) is focusing on cigarette alternatives, such as cigars, snuff and chewing tobacco, like other tobacco companies for future sales growth, because the decline in cigarette smoking is expected to continue. The company saw revenue, from its smokeless tobacco brands such as Copenhagen and Skoal and its Black and Mild cigars grow 9 percent and 21 percent, respectively. Other makers, those of Camel, Pall Mall and Natural American Spirit brand cigarettes are getting on board with alternatives saying higher prices, productivity gains and selling more of its smokeless tobacco brands that include Grizzly and Kodiak offset cigarette volume declines of 6.8 percent.

“Lorillard, the nation’s No. 3 cigarette maker, said Monday its net income fell nearly 3 percent as higher costs offset selling more cigarettes at higher prices. It sold about 3 percent more cigarettes on gains on its Newport and its low-priced Maverick brand,” according to Yahoo Finance.

Here’s how tobacco stocks are trading today:

  • Altria Group Inc. (NYSE:MO): The shares recently traded at $27.46, down $0.2, or 0.72%. Its market capitalization is $58.06 billion. They have traded in a 52-week range of $23.20 to $28.14. Volume today was 6,458,932 shares versus a 3-month average volume of 16,589,000 shares. The company’s trailing P/E is 16.73, while trailing earnings are $1.64 per share. The company pays a dividend of $1.64 per share for a dividend yield of 6.00%. About the company: Altria Group, Inc. is a holding company. The Company, through subsidiaries, manufactures and sells cigarettes and other tobacco products, including cigars and pipe tobacco. Altria holds an interest in a brewery company.
  • Lorillard, Inc. (NYSE:LO): The shares recently traded at $113.74, up $0.57, or 0.5%. Its market capitalization is $15.35 billion. They have traded in a 52-week range of $72.40 to $120.00. Volume today was 747,475 shares versus a 3-month average volume of 1,915,650 shares. The company’s trailing P/E is 15.32, while trailing earnings are $7.43 per share. The company pays a dividend of $5.20 per share for a dividend yield of 4.60%. About the company: Lorillard, Inc. manufactures and sells cigarettes. The Company produces cigarettes for both the premium and discount segments of the domestic cigarette market for sale to distributors and retailers in the United States.
  • Reynolds American Inc. (NYSE:RAI): The shares recently traded at $38.85, up $0.36, or 0.94%. Its market capitalization is $22.65 billion. They have traded in a 52-week range of $30.94 to $39.94. Volume today was 1,251,440 shares versus a 3-month average volume of 3,334,240 shares. The company’s trailing P/E is 16.89, while trailing earnings are $2.30 per share. The company pays a dividend of $2.12 per share for a dividend yield of 5.60%. About the company: Reynolds American Inc., through its subsidiaries, manufactures tobacco and smokeless tobacco products. The Company’s subsidiary sells its products in the United States and its territories.
  • Philip Morris International, Inc. (NYSE:PM): The shares recently traded at $71.76, up $0.3, or 0.42%. Its market capitalization is $125.51 billion. They have traded in a 52-week range of $55.85 to $72.74. Volume today was 2,332,177 shares versus a 3-month average volume of 9,582,230 shares. The company’s trailing P/E is 15.22, while trailing earnings are $4.71 per share. The company pays a dividend of $3.08 per share for a dividend yield of 4.50%. About the company: Philip Morris International Inc., through its subsidiaries, affiliates and their licensees, produces, sells, distributes, and markets a wide range of branded cigarettes and tobacco products in markets outside of the United States of America. The Company’s portfolio comprises both international and local brands.
  • British American Tobacco Industries, p.l.c. (AMEX:BTI): The shares recently traded at $95.06, up $2.4, or 2.59%. Its market capitalization is $94.18 billion. They have traded in a 52-week range of $72.54 to $95.53. Volume today was 231,560 shares versus a 3-month average volume of 381,312 shares. The company’s trailing P/E is 18.39, while trailing earnings are $5.17 per share. The company pays a dividend of $2.37 per share for a dividend yield of 2.60%. About the company: British American Tobacco PLC is the holding company for a group of companies that manufacture, market and sell cigarettes and other tobacco products, including cigars and roll-your-own tobacco.

Investing Insights: Altria Group Inc. Earnings Cheat Sheet: Margins Expand and Profit Climbs.

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