RICHMOND, Va. (AP) — Altria Group Inc.'s first-quarter profit dropped 15 percent as the Marlboro maker sold fewer cigarettes and its year-ago results benefited from lower expenses from a longstanding legal settlement.
The owner of the nation's biggest cigarette maker, Philip Morris USA, said Thursday that its cigarette shipments fell 2.5 percent to 29 billion cigarettes during the quarter. Adjusting for trade inventory changes, cigarette volumes fell 3.5 percent, compared with the total industry decline of about 4 percent.
Volumes of its premium Marlboro brand fell more than 2 percent but its share of the retail U.S. market rose 0.2 percentage points to 43.8 percent. The company's share of the U.S. retail market rose 0.2 percentage points to 50.7 percent.
The Marlboro brand has been under pressure from competitors and lower-priced cigarette brands amid economic uncertainty and high unemployment. The brand sold for an average of $5.91 per pack during the first quarter, compared with an average of $4.43 per pack for the cheapest brand.
The increased competition is on top of the tax hikes, smoking bans and a social stigma that have made the cigarette business tougher.
Altria and others are focusing on cigarette alternatives — such as electronic cigarettes, cigars, snuff and chewing tobacco — for future sales growth because the decline in cigarette smoking is expected to continue.
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