Marlboro maker Altria Group Inc said on Tuesday it expected full-year earnings to rise as much as 4% from last year and announced plans to make IQOS heated-tobacco devices available in more markets across the United States.
The company also increased its annual dividend by 2.4%, saying it had more clarity on the COVID-19 pandemic’s effects on consumer demand.
Altria said it would expand IQOS to four additional U.S. markets and partner with retailers to make the devices more broadly available over the next 18 months.
IQOS, which is owned by Philip Morris International Inc and marketed in the United States by Altria, received U.S. Food and Drug Administration approval to be marketed as a modified risk tobacco product in July.
Altria is among the first U.S. companies to reinstate earnings forecasts and said it expects full-year adjusted earnings of $4.21 to $4.38 per share, compared with a profit of $4.21 per share in 2019.
The company said it plans to boost profitability by cutting cigarette production costs, even as it continues to spend money on developing smokeless tobacco products such as nicotine pouches.
Still, Altria’s forecast was lower than its prior outlook, which was withdrawn due to the uncertainties around the pandemic’s economic impact.
Analysts on average expect 2020 earnings of $4.29, according to IBES data from Refinitiv.
The company’s revenues net of excise taxes fell 2.5% to $5.06 billion in the second quarter, beating analysts’ estimates of $5.04 billion.
Excluding items, Altria earned $1.09 per share in the quarter, above analysts’ estimates of $1.06 per share.
Altria’s shares rose a little over 1% in afternoon trading.
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