Altria Profit Drops on Promotion Costs
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Altria Group Inc., owner of the world’s No. 1 cigarette maker, had its first quarterly profit decline in almost two years as sales in the U.S. fell and the company spent more on promotions to win back smokers from lower-priced brands.
Net income in the fourth quarter dropped 18% to $1.77 billion, or 85 cents a share, from $2.16 billion, or 99 cents, a year earlier. Sales slipped 5.6% to $18.8 billion, Altria said.
Altria, which changed its name from Philip Morris Cos. on Monday, plans to temporarily cut prices to keep smokers of Marlboros and other brands from defecting.
Sales to U.S. retailers fell 12% in the quarter, while profit at Philip Morris USA declined by more than half to $789 million.
Shares of Altria fell $1.35 to $37.03 on the New York Stock Exchange.
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