RICHMOND, Va. (AP) — Marlboro maker Altria Group Inc.'s profit rose slightly the third quarter as higher prices helped to offset decline in the number of cigarettes it sold.
The owner of the nation's biggest cigarette maker, Philip Morris USA, posted earnings Thursday of $1.397 billion, or 71 cents per share. That's down slightly from $1.396 billion, or 70 cents a share, in the year-ago period.
Excluding one-time items, earnings were 69 cents per share, beating Wall Street expectations by a penny.
Altria, which increased cigarette pack prices by 6 cents, or about 2 percent, in May, said that revenue, excluding excise taxes, fell slightly to $4.75 billion. Analysts polled by FactSet expected $4.74 billion.
Its shares rose 4 cents to $47.57 in morning trading Thursday.
Cigarette shipments fell nearly 3 percent to more than 33 billion cigarettes. The company's share of the U.S. retail market rose 0.2 percentage points to 50.9 percent.
Volumes of its premium Marlboro brand fell nearly 3 percent but its share of the retail U.S. market rose 0.1 percentage points to 43.8 percent.
The Marlboro brand has been under pressure from competitors and lower-priced cigarette brands amid economic uncertainty and high unemployment. The brand sold for an average of $5.98 per pack during the third quarter, compared with an average of $4.51 per pack for the cheapest brand.
The increased competition is on top of the tax hikes, smoking bans and a social stigma that have made the cigarette business tougher.
Altria and others are focusing on cigarette alternatives — such as electronic cigarettes, cigars, snuff and chewing tobacco — for future sales growth because the decline in cigarette smoking is expected to continue.
Shipments of its smokeless tobacco brands such as Copenhagen and Skoal fell nearly 5 percent, while its market share grew to 55.4 percent. Volumes for its Black & Mild cigars rose more than 9 percent.
The company also said Thursday that it continues to expand distribution of its MarkTen e-cigarette, which is in about 80,000 retail stores primarily in the western half of the U.S. It plans to complete its national expansion in the fourth quarter. At the end of the third quarter, Altria said MarkTen's retail market share ranked in the top three in the western half of the country.
Altria, based in Richmond, Virginia, also owns a wine business, holds a voting stake in brewer SABMiller, and has a financial services division.
Michael Felberbaum can be reached at http://www.twitter.com/MLFelberbaum .