Altria Group, the Marlboro maker that’s been diversifying into cannabis and vaping, fell after reporting first-quarter results that disappointed Wall Street.
Revenue excluding excise taxes missed the lowest analyst estimate. It also said industry-wide cigarette volumes will keep falling this year.
The company’s cigarette shipments plummeted 14.3% in the first quarter, after a 4.4% slide the previous period, mirroring a wider industry trend toward alternative products.
The faster pace of decline signals the company may need to ramp up its investments in other product lines. It now expects industry-wide cigarette sales to fall between 4% and 5% this year, compared to the wider 3.5% to 5% range it had forecast at the start of the year.
Further declines in cigarette sales could be ahead amid a growing movement to stop selling tobacco products to buyers under 21.
Altria has been waiting for federal approval to market Philip Morris International’s IQOS cigarette-alternative in the US, but it gave no new updates on that timeline Thursday. Altria has said it’s still committed to the deal, despite having taken a stake in Juul Labs, which has a vaping device that some see as a competing product.
Investors looking for more information have plenty of chances ahead: There’s an earnings call coming later this morning, plus an annual meeting slated for May 16.
Shares fell as much as 7.3% to $50.70 - the most intraday in three months. They’d gained about 11% this year through Wednesday’s close, shy of the S&P 500’s 18% rise.