Boston, MA 04/30/2014 (wallstreetpr) – Altria Group Inc (NYSE:MO), the tobacco company that is trying to keep revenue coming even in the midst of challenges brought about by smoking restrictions, plans to roll out its electronic cigarette brand nationally beginning June.
The company has faced revenue decline in recent times as regulatory measures around tobacco smoking and increasing awareness of tobacco harm to human health impact sales. However, the company seems to be finding hope in its e-cigarette investment.
E-cigarettes deliver doses of nicotine to smokers while bypassing the harmful tobacco chemicals, thus, are considered much safer than tobacco sticks. As a result, many tobacco companies are investing in the emerging category to plug revenue decline.
Altria Group Inc (NYSE:MO)’s e-cigarette brand MarkTen, produced by Nu Mark, will launch nationally after a successful market trial in Arizona. Nu Mark is a subsidiary of Altria that concentrates on the development of e-cigarettes. The business recently closed the acquisition of Green Smoke, a company that makes and markets disposable e-cigarettes.
Regulatory clearance of e-cigarettes
The U.S. Food and Drug Administration recently issued regulatory measures around e-cigarettes. The agency allowed advertising and flavoring of the products but banned their sale to minors. As much, the rules seem lighter than expected. Therefore, as Altria Group Inc (NYSE:MO) rolls out national sale of MarkTen, it expects to capture a bigger market quickly with advertisement of the product. Moreover, the light regulatory measure around e-cigarettes gives the company confidence in making more and bigger investment in the emerging e-cigarette market.
Q12014 earnings summary
Altria Group Inc (NYSE:MO) reported revenue of $5.52 billion in Q12014. That compared with Q12013 revenue of $5.53 billion. Net earnings in the quarter were $1.18 billion, reflecting $0.59 per share. That was down from net earnings of $1.39 billion or $0.69 per share a year ago. While performance in the latest quarter seemed weaker than a year ago, the figures were almost in-line with Wall Street estimates.
