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RICHMOND, Va. (AP) -- Marlboro maker Altria Group posted flat second-quarter earnings Tuesday as higher prices helped to offset decline in the number of cigarettes it sold.
The owner of the nation's biggest cigarette maker, Philip Morris USA, also announced a new $1 billion share buyback program to be completed by the end of 2015 and narrowed its full-year earnings guidance.
The Richmond company reported earnings of $1.26 billion, or 64 cents per share, in the quarter ended June 30, compared with $1.26 billion, or 63 cents per share, a year ago.
Excluding one-time items, earnings were 65 cents per share, matching projections from analysts surveyed by Zacks Investment Research.
Revenue, excluding excise taxes, rose about 1 percent to $4.57 billion. Analysts expected $4.62 billion, according to Zacks.
Its shares fell 57 cents to $41.44 in morning trading Tuesday.
Cigarette shipments fell 5 percent to 32.1 billion cigarettes. Volumes of its premium Marlboro brand fell nearly 5 percent but its share of the retail U.S. market rose 0.3 percentage points to 44 percent. The company's share of the U.S. retail market rose 0.3 percentage points to 51 percent.
The Marlboro brand has been under pressure from competitors and lower-priced cigarette brands amid economic uncertainty and high unemployment. The brand sold for an average of $5.93 per pack during the second quarter, compared with an average of $4.47 per pack for the cheapest brand.
That's on top of the tax hikes, smoking bans and a social stigma that have made the cigarette business tougher.
Altria Group Inc. and others are focusing on cigarette alternatives -- such as electronic cigarettes, cigars, snuff and chewing tobacco -- for future sales growth because the decline in cigarette smoking is expected to continue.
Shipments of its smokeless tobacco brands such as Copenhagen and Skoal grew 1.6 percent. Volumes for its Black & Mild cigars rose nearly 9 percent. Both segments gained retail market share.
The company also said it began the national expansion of its MarkTen e-cigarette last month.
For the full year, the company said Tuesday that it expects adjusted earnings of between $2.54 and $2.59 per share. Analysts with the research data firm FactSet have projected earnings of $2.56 per share.
Altria also owns a wine business, holds a voting stake in brewer SABMiller, and has a financial services business.
During a conference call Tuesday, CEO Marty Barrington declined to comment on a plan by Reynolds American Inc. to buy Lorillard Inc. for $25 billion. The tie-up would create a formidable No. 2 tobacco company in the U.S. behind Altria.
It also would establish a new major player in the country's tobacco market, the U.K.'s Imperial Tobacco, which is buying some of the companies' other brands including Kool and Winston and instantly becomes the king of e-cigarettes in the U.S. with the Blu e-cigarette brand.
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