Altria Reports Third Quarter Results
Altria Group reported net revenues of $6.79 billion in the third quarter of 2021, down 4.7 percent from the previous year’s third quarter. Revenue net of taxes was down 2.6 percent to $5.53 billion. Net revenues for the 2021 nine months were $19.76 billion (down 0.5 percent), while net revenue net of excise was up 1.5 percent to $16.03 billion.
“Altria continued to balance maximizing profitability from our core tobacco businesses with investing to realize our Vision of responsibly leading the transition of adult smokers to a smoke-free future,” said Altria CEO Billy Gifford. “Our tobacco businesses performed well against difficult year-over-year comparisons, and we’re encouraged by the significant retail share growth from On! in the third quarter.”
In the third quarter, Altria sold its Ste. Michelle Wine Estates business and received net cash proceeds of approximately $1.2 billion, which Altria used to partially fund its expanded share repurchase program.
Marlboro HeatSticks retail sales volume increased by more than 20 percent sequentially, primarily driven by broader distribution outside of established metro markets and increasing demand in the Northern Virginia metro market.
However, Altria’s plans to roll out Philip Morris International’s IQOS tobacco heating system in the United States suffered a setback when the International Trade Commission (ITC) banned imports of that product following a dispute between PMI and British American Tobacco’s Reynolds American. subsidiary over intellectual property.
In a press note, Altria said it disagrees with the ITC’s decision as it believes that the plaintiff’s patents are invalid and that IQOS does not infringe those patents. The ITC’s decision is currently under a 60-day review by the Biden Administration. If the decision is not rejected through the administration’s review, the ITC cease-and-desist order will take effect on Nov. 29, 2021, making all IQOS and Marlboro HeatSticks products unavailable in the U.S. marketplace.
Altria said its Philip Morris USA subsidiary is preparing contingency plans surrounding sales and distribution, and has been in communication with PMI regarding its domestic manufacturing plans.
