5 Things Altria Management Wants You to Know
The secular decline in cigarette smoking in recent decades has done little to slow the growth of tobacco giant Altria Group (NYSE: MO). So far, the Marlboro maker has been able to take steps to offset long-term trends toward falling sales volume, using its pricing power and brand loyalty to defend its business. Following its second-quarter earnings report, Altria executives sat down with analysts to give more detail about the company's strategy and the near-term issues that Altria is facing right now. Here are five things they discussed that every investor should know about Altria.
The smokeable segment's results were negatively impacted by California's $2 per pack cigarette excise tax increase. ... Past experience shows that tax increases of this magnitude are most disruptive immediately following implementation, after which the rate of decline moderates.
Hard-hit state governments are always on the lookout for sources of tax revenue, and the tobacco industry has been a perennial target in many states. Last year, California became the latest state to impose new tobacco taxes, adding $2 to its existing excise tax. The move passed despite Altria's attempts to convince the public not to vote for the measure.
Source: Fool.com