Cigarette Price Cuts Boost Profit at Altria
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Altria Group Inc., parent of cigarette maker Philip Morris, said fourth-quarter earnings rose 18% after it reduced prices on Marlboro and other top sellers to win back smokers who had switched to cheaper brands.
Net income climbed to $2.09 billion, or $1.02 a share, from $1.77 billion, or 85 cents, in the year-earlier period, the New York-based company said in a statement. Sales at Altria, which also owns Kraft Foods Inc., increased 10% to $20.7 billion from $18.8 billion.
Altria cut prices by 65 cents a pack on its four biggest brands in February, helping boost Marlboro’s share of the U.S. cigarette market 1 percentage point to 38.5% in the quarter and leading to the company’s first profit gain in five quarters.
Net income for 2003 was $9.2 billion, or $4.52 a share.
Altria shares rose 65 cents to $55.65 on the NYSE.
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