Young Research & Publishing Inc.

Investment Research Since 1978

Disclosure

  • About Us
    • Contributors
    • Archives
    • Dick Young’s Safe America
    • The Final Richard C. Young’s Intelligence Report
    • You’ve Read The Last Issue of Intelligence Report, Now What?
    • Dick Young’s Research Key: Anecdotal Evidence Gathering
    • Crisis at Vanguard
  • Investment Analysis
    • Bonds
    • Currencies and Gold
    • Dividend Investing
    • ETFs & Funds
    • Investment Strategy
    • Retirement Investing
    • Stocks
    • The Efficient Frontier
  • Investment Counsel
  • Retirement Compounders®
  • Free Email Signup

Falling Sales for Smokes Make the Case for E-Cigs Say Tobacco Companies

February 4, 2019 By Young Research

By Roman Kosolapov @ Shutterstock.com

Sales of traditional cigarettes are falling even faster than expected. That trend is reassuring tobacco companies like Altria of the importance of their investments in e-cigarettes and other smokeless alternatives. Jennifer Maloney writes for The Wall Street Journal:

Altria CEO Howard Willard on Thursday offered new projections on U.S. cigarette industry volumes, saying cigarette sales would continue to decline at a faster clip than they have in the past as smokers switch to e-cigarettes. He also said his company’s recent $12.8 billion investment in vaping startup Juul Labs Inc. would allow the tobacco giant “to support and even accelerate transition to noncombustible alternative products.”

Altria said U.S. cigarette sales volumes declined 4.5% last year—more sharply than expected—as e-cigarette sales grew 35% and higher gas prices also damped cigarette sales. Over the same period, the company’s market-leading Marlboro brand declined 5.2% in volume. Altria now expects U.S. cigarette volumes to decline 3.5% to 5% this year and 4% to 5% a year through 2023, while e-cigarette volumes grow 15% to 20% a year, Mr. Willard said.

Altria’s share price is down more than 14% since The Wall Street Journal first reported in November that the tobacco giant was in talks with Juul, whose sales exploded last year to capture 75% of the retail e-cigarette market. Altria ultimately took a 35% stake, valuing the upstart at $38 billion. Mr. Willard, a company veteran who took over as Altria’s chairman and CEO in May, sought Thursday to allay investor concerns about the deal and a separate $1.8 billion investment in Canadian marijuana company Cronos Group . CRON 11.73%

Last year “was a transformative year for Altria,” Mr. Willard said on a call with analysts. He said the investments in Juul and Cronos would allow Altria to participate in categories poised for rapid growth overseas as U.S. cigarette sales fall.

Calling Juul’s growth “remarkable,” Mr. Willard said the e-cigarette company had more than $1 billion in revenue in 2018, up from $200 million in 2017. It sold more than 450 million refill pods last year, he said.

Read more here.

Share this:

  • Email
  • Twitter
  • Facebook

You Might Also Like:

  • Business Boom Driving PC Sales
  • China’s Relentless Auto Sales Slowdown
  • Despite Retailer Slaughter, Sales Strong
  • Author
  • Recent Posts
Young Research
Latest posts by Young Research (see all)
  • Happy Martin Luther King Jr. Day! - January 16, 2023
  • Russia’s Arctic Oil Seeps into Asia - January 5, 2023
  • CHIPS: From Shortage to Surplus - January 3, 2023

Search Young Research

Most Popular

  • You Aren't Getting These Yields from Your Bank Account
  • What Your Survival Guy Invested in Today
  • Tom Brady Retires, Again. Should You?
  • Do You Trust This Rally?
  • Suddenly, Holding Cash Looks Good Again to Many
  • Vanguard Wellesley (VWINX) vs. Wellington (VWELX): Which Fund is Best?
  • The Power of a Compound Interest Table
  • Early Advice from Her Dad on Tipping at Charlie Trotter’s
  • Real Estate "Power Buyers" Suffering Glut of Inventory
  • What Happens if the "Fed Put" Is Over for Good?

Don’t Miss

Default Risk Among the Many Concerns with Annuities

Risk and Reward: An Efficient Frontier

How to be a Billionaire: Proven Strategies from the Titans of Wealth

Could this Be the Vanguard GNMA Winning Edge?

Cryptocosm and Life After Google

Warning: Avoid Mutual Fund Year End Distributions

Is Gold a Good Long-term Investment?

How to Invest in Gold

Vanguard Wellington (VWELX): The Original Balanced Fund

What is the Best Gold ETF for Investing and Trading?

Procter & Gamble (PG) Stock: The Only True Dividend King

The Dividend King of the North

You’ll Love This if You’re Dreaming of an Active Retirement Life

RSS The Latest at Richardcyoung.com

  • Big Hearted, Idealistic, Daring…
  • Yes, Your Children Are Listening to You
  • BEN CARSON: How Is Biden’s Speech Creating Unity?
  • Biden’s State of the Union Address Receives Rough Reception
  • Can a Capital Injection Save Bed Bath & Beyond?
  • You Aren’t Getting These Yields from Your Bank Account
  • Democrats’ Widening Schism
  • Jimmy Buffett Playing Key West
  • Whatever You Knew, Dave Hammer Knew More
  • Dragon Tours Open for Business

RSS The Latest at Yoursurvivalguy.com

  • Yes, Your Children Are Listening to You
  • You Aren’t Getting These Yields from Your Bank Account
  • Bidenflation Has Eaten Up Americans’ Pandemic Savings
  • Dragon Tours Open for Business
  • What Your Survival Guy Invested in Today
  • You Invest, They Win: FTX Edition
  • Your Retirement Life: Adventure Awaits
  • Zumwalt-Class Guided Missile Destroyers to Get Hypersonic Weapons
  • Early Advice from Her Dad on Tipping at Charlie Trotter’s
  • Treasury Bonds Ready to Rock and Roll

About Us

  • About Young Research
  • Archives
  • Contributors

Our Partners

  • Richard C. Young & Co.
  • Richardcyoung.com

Copyright © 2023 | Terms & Conditions

 

Loading Comments...
 

    loading Cancel
    Post was not sent - check your email addresses!
    Email check failed, please try again
    Sorry, your blog cannot share posts by email.