Altria Group Inc. (MO) plans to raise prices on Marlboro and several other cigarette brands by 71 cents a pack, a move expected to help the cigarette maker's profits.

The pricing change - described by Citigroup analysts as "extremely bullish" for the domestic tobacco industry - pushed Altria shares up 5% early Thursday.

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 had been widely expected to cut some smokeless tobacco prices as UST's premium brands had faced tough competition from cheaper competing products before the acquisition. The lower prices could boost volumes of Altria's smokeless brands and make them more attractive to consumers.

Altria's move to lower smokeless prices could mean fresh competition for Reynolds American Inc. (RAI), which sells smokeless tobacco products like popular discount brand Grizzly through its Conwood unit. Altria is also discontinuing UST's Rooster smokeless tobacco brand.

The cigarette price increase is far more important than the smokeless price cut, Citigroup noted, as cigarettes contribute about 80% of Altria's profit.

As the tobacco industry's dominant player, Altria has "lifted prices by more than, and sooner than, expected," the Citi analysts noted. An Altria spokesman said the list price increases on cigarettes are primarily intended to cover the costs of a federal excise tax increase that goes into effect later this year.

The U.S. tobacco industry has been seeing a drop in volumes amid higher taxes and bans on smoking in public places. Analysts had widely expected those volume declines to accelerate this year after a 61 cent per pack federal excise tax increase on cigarettes goes into effect in April. Higher prices for cigarettes would potentially help cigarette makers shore up their profits in the face of those volume declines. Citigroup expects Altria's competitors Reynolds and Lorillard Inc. (LO) to follow up with their own price increases on cigarettes. Both companies declined to comment.

Altria'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