Altria's Move To Change Pricing Seen As A Positive
March 05 2009 - 9:50AM
Dow Jones News
Altria Group Inc. (MO) plans to raise prices on Marlboro and
several other cigarette brands by 71 cents a pack, in a move
expected to help the cigarette maker's profits.
Citigroup analysts described the move as "extremely bullish for
the domestic tobacco industry."
As the tobacco industry's dominant player, Altria has "lifted
prices by more than, and sooner than, expected," the Citi analysts
noted.
Altria, however, plans to cut prices for Copenhagen and Skoal
the smokeless tobacco brands it acquired through its purchase of
UST Inc. by 62 cents per tin. Altria's pricing moves are being
closely watched partly because cuts in its smokeless tobacco prices
would mean greater competition for Reynolds American Inc.'s (RAI)
brands.
The tobacco maker's moves to hike prices on cigarettes should
support much stronger first-quarter profits and a generally
stronger profit growth profile for its cigarette business, noted
Stifel Nicolaus analyst Chris Growe.
-By Anjali Cordeiro, Dow Jones Newswires; 201-938-2408;
anjali.cordeiro@dowjones.com