RICHMOND, Va. ? Marlboro maker Altria Group Inc. said Friday its fourth-quarter profit fell about 9 percent on lease and restructuring charges even as higher prices and gains from its smokeless tobacco products helped bolster its sales.
The owner of the nation's biggest cigarette maker, Philip Morris USA, also announced that CEO Michael E. Szymanczyk will retire in May following the company's annual shareholder meeting. Altria's board has selected Martin J. Barrington to replace him as CEO and chairman, and David R. Beran will serve as president and chief operating officer.
The company also disclosed that it has entered into an agreement with an affiliate of Fertin Pharma A/S to develop non-combustible nicotine-containing products.
Its shares rose 28 cents to $28.94 in premarket trading.
Richmond, Va.-based Altria reported net income of $836 million, or 41 cents per share, for the three-month period ended Dec. 31, down from $919 million, or 44 cents a share, last year. On an adjusted basis, the company earned 50 cents per share, a penny above Wall Street expectations.
Revenue, excluding excise taxes, increased 5 percent to $4.34 billion. Analysts polled by FactSet were expecting $4.23 billion.
Cigarettes volumes were flat at 33.7 billion cigarettes compared with a year ago as an increase of nearly 20 percent in its discount cigarette brands offset declines in its premium brands like Marlboro. Cigarette revenue excluding excise taxes rose 4 percent to $3.63 billion during the quarter on higher prices.
Altria said its top-selling Marlboro brand lost 0.7 points of market share to end up with 41.6 percent of the U.S. market. Marlboro volumes declined less than 1 percent. Its other brands, including Virginia Slims, Parliament and Basic, also lost market share.
The company has introduced several new products with the Marlboro brand, often with lower promotional pricing. They include special blends of both menthol and non-menthol cigarettes to try to keep the brand growing and steal smokers from its competitors.
Altria still faces pressure in the current economy from less-expensive brands such as like Pall Mall from Reynolds American Inc. and Maverick from Lorillard Inc.
Like other tobacco companies, Altria is focusing on cigarette alternatives ? such as cigars, snuff and chewing tobacco ? for future sales growth because the decline in cigarette smoking is expected to continue.
Volumes of its smokeless tobacco brands such as Copenhagen and Skoal increased about 10 percent. Excluding excise taxes, revenue from its smokeless tobacco business grew nearly 7 percent to $391 million on higher prices.
For the quarter, the company's smokeless tobacco brands had 55.5 percent of the market, which is tiny compared with cigarettes.
Volume for its Black & Mild cigars fell about 6 percent during the period. But revenue excluding excise taxes rose 26 percent to $90 million as it raised prices and spent less money promoting the brand.
Altria also owns a wine business and holds a voting stake in brewer SABMiller.
Altria has been forced to cut costs as tax hikes, smoking bans, health concerns and social stigma make the cigarette business tougher. During the third quarter, the company said it completed a multi-year cost savings program, exceeding its goal of reducing costs by $1.5 billion between 2007 and 2011 compared with 2006.
Last quarter the company rolled out a plan to cut $400 million in "cigarette-related infrastructure costs" by the end of 2013 in advance of anticipated cigarette volume declines. Altria said the restructuring charges in connection with the program totaled 7 cents per share in the fourth quarter.
For the full year, the company said it earned $3.39 billion, or $1.64 per share, in 2011 compared with $3.9 billion, or $1.87 per share, in the previous year. It said its adjusted earnings for the year were $2.05 per share.
Altria also said it forecast 2012 full-year adjusted earnings between $2.17 and $2.23 per share.
Michael Felberbaum can be reached at http://www.twitter.com/MLFelberbaum.