Altria’s second-quarter profit inched lower as the tobacco giant reported lower shipments of Marlboro and other tobacco brands.
Total cigarette volume slid 5% in the latest quarter. For Marlboro, by far the company’s largest brand, volume dropped 4.9% but gained some market share as other tobacco brands performed worse during the quarter.
Overall, Altria (MO) reported a profit of $1.26 billion, down from $1.27 billion a year ago. On a per-share basis, earnings grew by a penny to 64 cents because the latest period had fewer shares outstanding. Excluding litigation and other items, adjusted profit climbed to 65 cents from 62 cents a share. Net revenue, excluding excise taxes, rose 1% to $4.57 billion.
Analysts had expected an adjusted profit of 66 cents a share on $4.59 billion in revenue.
Altria’s total cigarette market share stood at 51%, up from 50.7% last year.
Tobacco firms in the U.S. have faced chronic declines in traditional cigarette shipments, as fewer consumers smoke and some experiment with alternative products like e-cigarettes.
Altria could also face a different competitive environment if Reynolds American’s $27.4 billion agreement to acquire Lorillard (LO) wins approval from regulators. That merger will combine the second and third-largest U.S. tobacco companies, though Reynolds (RAI) is also planning to sell off several assets to make the U.K.’s Imperial Tobacco a stronger player in the U.S.
On Tuesday, Altria also slightly raised its full-year adjusted profit target for the year, now seeing a range of $2.54 to $2.59 in per-share earnings. The company also announced a new $1 billion share repurchase program to be completed by the end of 2015. Share buybacks, along with cigarette price increases and cost cutting, are some of the key drivers of profitability growth for major tobacco companies.