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Shipments of Altria Products are Declining

Altria Group announced several days ago that it intends to get rid of jobs within a cost-savings program that will save the company $300 million yearly.

During a call with experts, Chief Executive Marty Barrington refused to state how many jobs would be reduced since the company intended to alert staff of the layoffs after the call. He explained the company needs “to have an organizational framework with fewer layers.”

The Marlboro producer stated the cuts would come from its selling, general and management areas and lead to around $120 million in employee-separation costs that will be documented in the Q1 of 2016.

“You should have to be aware of costs with time,” Mr. Barrington mentioned when asked about what prompted the cost- savings strategy. “If you have chances to strengthen in your infrastructure or to strengthen your organization and to spend those savings in your cigarettes or in your products for the future…you need to do that.”

Altria, the U.S.’s biggest tobacco company, revealed revenue for the Q4 that directly missed Wall Street objectives as the tobacco company found its cigarette shipments decreasing. The company is dealing with a more powerful competition from No. 2 manufacturer Reynolds American, which last June closed a $25 billion purchase of rival Lorillard.

In its most recent quarter, Altria explained larger pricing served to compensate a 2.6% drop in cigarette-shipment volume.

Altria’s cigarette market share increased to about 51.4% from 50.9% a year earlier, guided by its low cost and Marlboro brands.

Altria’s revenue went up just a bit to $1.25 billion, from $1.24 billion a year before. Not including litigation costs and other specific items, per-share revenue was 67 cents, while experts polled by Thomson Reuters forecast revenue of 68 cents.

Net profits after excise taxes constituted $4.73 billion, higher from $4.61 billion a year earlier. Industry experts had been anticipating profits of about $4.75 billion.

For 2016, Altria is anticipating revenue of around $3 to $3.05 per share, eliminating restructuring costs. Analysts had predicted revenue of $3.05 a share


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