Altria: iQOS cigarette alternative off market through 2022

Jan 27, 2022, 7:54 AM | Updated: 1:58 pm

WASHINGTON (AP) — Marlboro-maker Altria said Thursday that its heat-not-burn cigarette, iQOS, probably won’t be back in U.S. stores for at least a year, while sales of its traditional cigarettes continued to slide.

The Richmond, Virginia-based company updated investors on iQOS after being forced to pull it from the U.S. market late last year due to a patent dispute. The product, marketed as a less-harmful alternative to combustible cigarettes, is a tiny share of Altria’s revenue but key to its 10-year plan to switch its business away from traditional tobacco products.

Despite the setback, Altria reported better-than-expected quarterly earnings and an upbeat outlook for the coming year. The company posted adjusted earnings of $1.09 per share for the fourth quarter, on revenue of $5.09 billion, surpassing Wall Street forecasts.

Most the company’s revenue gains came from price hikes on Marlboro, Parliament and other cigarette brands. Actual packs sold continued to slide during the period, declining 6% in terms of shipment volumes. The company said it expects full-year 2022 earnings in the range of $4.79 to $4.93 per share.

Altria has been working for years to shift more of its business away from cigarettes amid steady declines in smoking. But that effort has repeatedly been knocked off course.

In the latest example, the company was forced to halt its rollout campaign for iQOS after U.S. officials ruled that its technology infringed on two patents owned by competitor R.J. Reynolds. The Biden administration has declined to intervene in the decision from U.S. International Trade Commission.

iQOS is manufactured overseas by sister company Philip Morris International and imported and marketed by Altria. The two divisions of Philip Morris split into separate companies in 2008.

Altria, which runs Philip Morris USA, said Thursday it “does not expect to have access to IQOS devices” in 2022, but “remains focused on returning IQOS to the market and is working on re-entry plans.” Altria has a contract to sell the device exclusively in the U.S. through mid-2024.

Altria and Philip Morris International say they have discussed several workarounds for the import ban, including moving production to the U.S. or redesigning the product. iQOS is sold in dozens of countries around the world but the U.S. launch was limited to a handful of cities, amid intense scrutiny from U.S. regulators and anti-tobacco advocates.

The nonprofit Campaign for Tobacco-Free Kids said Thursday that Altria’s results show the company isn’t serious about phasing out cigarettes and cigars, which made up 88% of its revenue last year.

“Rather than moving beyond smoking, Altria’s main business is to promote and perpetuate the use of cigarettes,” the group said in a statement.

Altria’s investment in the troubled vaping company Juul Labs faces also faces headwinds, including the possibility that health regulators will permanently ban it from the U.S. market. The Food and Drug Administration is still weighing whether to allow it to remain as a less harmful alternative for smokers.

Altria took a $13 billion stake Juul in 2018, which has since been hit by a wave of lawsuits and local restrictions due to underage use of its high-nicotine vape pods. Altria now says the investment is worth just $1.7 billion.

One bright spot in the company’s transition effort has been nicotine pouches, which Altria says now account for nearly 4% of the U.S. oral tobacco market. The company says its pouches are sold in more than 115,000 U.S. stores.

Company shares rose more than 2.5% to $50.72 in trading Thursday.

___

This story includes elements generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on MO at https://www.zacks.com/ap/MO

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

A sign at Twitter headquarters is shown in San Francisco, Friday, Nov. 18, 2022. (AP Photo/Jeff Chi...
Associated Press

Twitter ends enforcement of COVID misinformation policy

Twitter will no longer enforce its policy against COVID-19 misinformation, raising concerns among public health experts and social media researchers that the change could have serious consequences if it discourages vaccination and other efforts to combat the still-spreading virus. Eagle-eyed users spotted the change Monday night, noting that a one-sentence update had been made to […]
19 hours ago
Associated Press

MLB sells share of BAMTech to Walt Disney Co. for $900M

NEW YORK (AP) — Major League Baseball has sold its remaining share of a streaming service technology company to the Walt Disney Co. for $900 million. The sale was disclosed Tuesday in Walt Disney Co.’s annual filing report through the SEC. MLB received the $900 million in exchange for the 15% stake it still had […]
19 hours ago
In this photo released by Xinhua News Agency, the manned spaceship Shenzhou-15, atop the Long March...
Associated Press

Chinese spaceship with 3 aboard docks with space station

BEIJING (AP) — Three Chinese astronauts docked early Wednesday with their country’s space station, where they will overlap for several days with the three-member crew already onboard and expand the facility to its maximum size. Docking with the Tiangong station came at 5:42 a.m. Wednesday, about 6 1/2 hours after the Shenzhou-15 spaceship blasted off […]
19 hours ago
Colorado Gov. Jared Polis speaks at a memorial set up outside Club Q in Colorado Springs, Colo., on...
Associated Press

Colorado governor visits gay club shooting memorial

COLORADO SPRINGS, Colo. (AP) — Colorado Gov. Jared Polis on Tuesday visited the memorial outside a gay club where five people were killed last week, solemnly walking along a line of flowers, crosses and signs bearing the photos and names of the victims outside the building with the club’s owners. When he reached the end, […]
19 hours ago
The Kid Laroi appears at the 64th Annual Grammy Awards in Las Vegas on April 3, 2022, left, and Jus...
Associated Press

Apple Music reveals top music in 2022 and listener charts

NEW YORK (AP) — “Stay,” the smash hit by The Kid Laroi and Justin Bieber topped Apple Music’s global song chart in 2022 as the giant music streamer released its end-of-year lists and provided listeners with data on their own most listened-to tunes. “Stay,” which stayed atop the Billboard Hot 100 for seven weeks this […]
19 hours ago
FILE - An SUV rests inside an Apple store behind a large hole in the glass front of the store on No...
Associated Press

Lawsuits claim negligence in Massachusetts Apple store crash

BOSTON (AP) — The family of a man who was badly hurt when an SUV crashed into an Apple store in Massachusetts, killing one person and injuring 20, sued the company, the driver and the property owners Tuesday in one of the first lawsuits filed over the crash. Matthew Timberger, of Falmouth, suffered broken bones […]
19 hours ago

Sponsored Articles

...
Day & Night Air Conditioning, Heating and Plumbing

Prep the plumbing in your home just in time for the holidays

With the holidays approaching, it's important to know when your home is in need of heating and plumbing updates before more guests start to come around.
(Photo via MLB's Arizona Fall League / Twitter)...
Arizona Fall League

Top prospects to watch at this year’s Arizona Fall League

One of the most exciting elements of the MLB offseason is the Arizona Fall League, which began its 30th season Monday.
...
Quantum Fiber

Stream 4K and more with powerful, high-speed fiber internet

Picking which streaming services to subscribe to are difficult choices, and there is no room for internet that cannot handle increased demands.
Altria: iQOS cigarette alternative off market through 2022