Altria Group beat market expectations for third-quarter revenue and profit on Thursday, as robust demand for its nicotine pouches and vaping products helped soften the blow to its combustible cigarettes category.
Altria’s NJOY vapes and on! nicotine pouches have seen steady demand in the United States, and its menthol-flavored NJOY vape products received authorization from the U.S. Food and Drug Administration for sale.
“Altria delivered outstanding results in the third quarter,” said Billy Gifford, Altria’s CEO. “The smokeable products segment delivered solid operating companies income growth behind the resilience of Marlboro, and in the oral tobacco products segment, our MST brands continued to drive profitability while on! maintained momentum in the marketplace. We also continued to reward shareholders through a growing dividend and share repurchases while making investments in pursuit of our vision.”
The company disclosed in July that it had provided data to the FDA regarding the growth of illegal nicotine pouches, which illustrated the early stages of a significant black market for vapes.
In the third quarter, domestic cigarette shipment volume in the smokeable products segment decreased by 8.6%. In contrast, NJOY devices saw a shipment volume increase of over 100% year-over-year, reaching 1.1 million units, according to a press release.
Shipment volume for on! nicotine pouches increased by 46% this quarter, while demand for the company’s chewing tobacco products, such as Copenhagen, continued to weaken.
Shares of the Marlboro maker increased by approximately 1% in premarket trading. They have grown by about 25% this year.
Altria’s third-quarter adjusted earnings per share of $1.38 topped market expectations of $1.35. The company maintained its annual profit forecast of between $5.07 and $5.15 per share.
Last week, peer Philip Morris lifted its annual profit target betting on strength in demand for its flagship IQOS heated tobacco device as well as ZYN nicotine pouches.