(Reuters) - Marlboro maker Altria (NYSE:MO) edged past fourth-quarter adjusted profit expectations on Thursday, as higher prices and a shift to alternative nicotine products helped cushion the blow from sluggish demand for traditional tobacco products.
Globally, tobacco companies are grappling with stricter regulation, competition from alternatives like vapes and greater awareness of the health risks of their core products.
Altria's shares were up about 1% in premarket trading. The company also forecast 2024 adjusted profit in line with expectations and announced a new $1 billion share repurchase program.
The tobacco giant raised its prices for multiple quarters as demand for traditional cigarettes in the United States buckles under stiff competition from e-cigarettes.
It is also investing in tobacco alternatives such as NJOY vapes as customers shift to newer ways of consuming nicotine.
Reported shipment volume for NJOY consumables was about 11.1 million units, compared with 7.5 million pods last quarter.
It reported fourth-quarter adjusted profit of $1.18 per share, compared to an expectation of $1.17, according to LSEG data.
Altria expects 2024 adjusted profit per share to rise between 1% and 4%, to a $5 to $5.15 range. Analysts expected full-year profit per share of $5.08.
Tough economic conditions have seen some of the company's customers migrating to cheaper brands.
Quarterly net revenues in its smokable products division fell 3.3% due to higher promotions. It also reported a 7.6% fall in domestic cigarette shipment volumes.
Like peer Philip Morris (NYSE:PM), Altria has invested in tobacco-free nicotine pouches that have gained traction against its traditional oral tobacco products such as Copenhagen and Skoal.
Shipment volume for Altria's on! nicotine pouches grew 32.8% in the reported quarter, lower than the 36.7% rise in the last quarter.
The company's revenue net of taxes fell 1.2% to $5.02 billion in the fourth quarter, missing LSEG expectations of revenue of $5.06 billion.