Daily Archives: April 22, 2010

Copenhagen, Marlboro boost Altria profit

Tobacco titan Altria Group Inc. said Wednesday that its first-quarter profit rose 38%, helped by demand for Marlboro cigarettes and marlboro cigarettesCopenhagen smokeless tobacco.

Altria /quotes/comstock/13*!mo/quotes/nls/mo (MO 21.46, +0.29, +1.37%) earned $813 million, or 39 cents a share, in the quarter, up from $589 million, or 28 cents a share, a year earlier.

Revenue at the Richmond, Va.-based company rose 27% to $5.76 billion from $4.52 billion.

On an adjusted basis, the company said it would have earned 42 cents a share in the latest quarter.

The average estimate of analysts polled by FactSet Research had been for the company to earn 40 cents a share.

Altria said the business environment this year is likely to remain challenging. It maintained its forecast that its 2010 profit would come in at $1.78 to $1.82 a share, including charges of 7 cents a share related to exit, integration and implementation costs, UST-acquisition-related costs, and SABMiller /quotes/comstock/23s!a:sab (UK:SAB 2,009, 0.00, 0.00%) special items.

Knocking those out, profit is forecast to be $1.85 to $1.89 a share.

Altria spun off Philip Morris International /quotes/comstock/13*!pm/quotes/nls/pm (PM 51.99, +0.07, +0.13%) at the end of March 2008 in a move designed to separate the fast-growing overseas cigarette business from a U.S. unit hobbled by litigation worries, huge payments to states and seemingly inexorable year-on-year volume declines.

During the period, Philip Morris USA’s domestic cigarette shipments were down 0.7% while its flagship Marlboro brand’s retail share rose 0.3 percentage point to 42.7%. Marlboro volume was up 1.6%, while all of the company’s other brands suffered, in aggregate, double-digit declines.

Cigar volume at its Middleton unit was down 18.3%, a decline the company attributed to its belief that wholesalers stocked up in the year-earlier period in advance of an increase in federal excise taxes.

On the brighter side, sales of smokeless tobacco brands, including Copenhagen and Skoal, rose 28% versus the prior-year period.

“Marlboro achieved record retail share results in the first quarter, and Copenhagen regained its position as the largest smokeless tobacco brand, as measured by retail share,” Chief Executive Michael Szymanczyk said in the earnings report.

Standard & Poor’s reiterated its strong buy recommendation on the company’s shares following the report.

The company’s adjusted earnings were better than S&P’s estimate, wrote analyst Esther Kwon and “shipment decline of 0.7% was better than our view on easy comparison on inventory draw down last year.”

Further, “Marlboro retail share rose 0.3% year over year, while premium smokeless share increased from the fourth quarter and year ago quarter,” she added. “While we see volumes continuing to be impacted by inventory changes, we look for strong free cash flow generation.”

Shares rose about 1.4% to close at $21.46.

Smoking ban in public goes into effect in Syria

DAMASCUS, Syria — A smoking ban that few are expected to abide by went into effect in Syria Wednesday, a country where people light up even in hospitals.

The ban targets most public places such as restaurants, cafes, schools, universities, hospitals, parks, movie theaters, museums and public transport.

The law, which also forbids the sale of cigarettes to minors, was approved six months ago by President Bashar Assad, a British-trained eye doctor.

The Middle East’s favorite pastime — smoking water pipes — is also prohibited in public under the new law except in well-ventilated and designated areas. Also outlawed are tobacco advertising and the sale and import of sweets and toys modeled after tobacco products.

Offenders will face fines ranging between $45 and $870 and a possible three to 12 months in jail.

“The ban is good, but I doubt I will stop smoking,” said businessman Bassam Shanna, 47.

The ban’s effects are already being felt in Damascus’ famous cafes.

The normally bustling indoor area of the Nowfara Cafe in the city’s downtown area was almost entirely empty on Wednesday.

“Fifty people would be sitting here if it weren’t for the ban” complained the manager, Shadi Rabbat.

However, the cafe’s terrace was crowded with some 50 customers smoking water pipes.

“We hope the government will reconsider the ban,” said another cafe owner who refused to give his name because he feared reprisals by the authorities.

Syria had in the past taken steps to try to restrict smoking, including a 1996 decree issued by Assad’s late father, President Hafez Assad, that banned smoking in government offices, hospitals and the airport.

A 2004 law banned smoking in internet cafes and another law in 2006 made buses, railway stations, movie theaters, parks and cultural centers smoke-free, with violators facing a fine of about $10 and three months in jail. But the bans were often flouted and not strictly enforced.

This time, however, more sweeping measures were being taken, reflecting Syria’s desire to join other Arab countries struggling to control smoking with bans and anti-smoking campaigns.

Fines are also steeper this time round — the fine for smoking in a cafe is $45 while it goes up to a staggering $870 in five-star hotels.

Health ministry officials will be frequently carrying out on site inspections to ensure the law was being observed in public places.

“It’s a chance for me to seriously try to quit smoking,” said Mohammed al-Kash, a sociology professor at Damascus University. “I am fully committed to the ban.”

Three million people — or 15 percent of Syria’s 23.5 million population — smoke. As much as 23 percent of these are university students, according to figures published in the state media. Syrians are thought to spend $565 million a year on smoking.

Other Arab countries are also struggling to create a more smoke free environment.

In the tobacco-loving Arab world, people smoke in offices, universities, taxis, hair salons and even hospitals and smoking has long been a social imperative and a rite of passage for young men.

Packs can cost as little as 50 cents in some Arab nations.

Egypt, Lebanon, the United Arab Emirates and most recently Iraq have imposed restrictions on smoking in public, but the bans vary in scope and enforcement.

The Palestinian Authority in the West Bank, for example, has no laws banning smoking in government offices or public places, and government employees — including President Mahmoud Abbas and Prime Minister Salam Fayyad — regularly smoke in their offices.

Kelly Clarkson Tries and Fails to Snuff Out Cigarette Controversy

Where there’s smoking, there’s ire. Unfortunately, Kelly Clarkson’s just landed in the crosshairs.Kelly Clarkson

The original American Idol winner created quite a stir when billboards and TV ads popped up in Jakarta promoting her concert—and its sponsor, Indonesian cigarette company L.A. Lights. As with Alicia Keys before her, antismoking activists immediately challenged Clarkson to cancel the show or risk sending a bad message to her young fans.

Alas, Miss Independent claims she knew nothing of the matter.

“My morning began with finding out that I am all over billboards, TV ads and other media formats alongside a tobacco company who, unbeknownst to me, is sponsoring my Jakarta date on my current tour,” she writes on her blog. “I was not made aware of this and am in no way an advocate or an ambassador for youth smoking. I’m not even a smoker, nor have I ever been.”

That said, she has no intention of canceling her April 29 performance.

“I can’t justify penalizing my fans for someone else’s oversight,” she explains. “This is a lose-lose situation for me and I am not happy about it but the damage has been done and I refuse to cancel on my fans.

“I think the hardest part of situations like this is getting personally attacked for something I was completely unaware of and being used as some kind of political pawn,” she concludes. (Guess she doesn’t pay attention to the fine print when she signs those big-bucks concert contracts.)

But the Campaign for Tobacco-Free Kids isn’t buying Clarkson’s “for the fans” spin.

She “has let down her fans and chosen to be a spokesperson for the tobacco industry” by going on with the show, says CTFK spokeswoman Marina Carter. “In doing so, Ms. Clarkson is allowing her name, image and talent to be used to promote cigarettes to Indonesian youth.

We again call on Ms. Clarkson to withdraw tobacco industry sponsorship of her concert and to demand the removal of any tobacco-branded advertising and promotions associated with it.”