Alternative to off-market iQOS cigarettes until 2022

WASHINGTON (AP) — Marlboro maker Altria said Thursday that its unburnt heat cigarette, iQOS, likely won’t be back in U.S. stores for at least a year, while sales of its traditional cigarettes continue. down.

The Richmond, Virginia-based company has updated investors on iQOS after it was forced to pull it from the US market late last year due to a patent dispute. The product, marketed as a less lethal alternative to combustible cigarettes, represents a tiny fraction of Altria’s revenue but is key to its ten-year plan to move its business away from traditional tobacco products.

Despite the setback, Altria announced better than expected quarterly results and an optimistic outlook for the year ahead. The company posted fourth-quarter adjusted earnings of $1.09 per share on revenue of $5.09 billion, beating Wall Street forecasts.

Most of the company’s revenue gains came from price increases on Marlboro, Parliament and other cigarette brands. Actual packs sold continued to decline over the period, down 6% in terms of shipment volumes. The company said it expects full-year 2022 earnings of between $4.79 and $4.93 per share.

Altria has been working for years to shift more of its business away from cigarettes amid a steady decline in smoking. But this effort has repeatedly been deflected.


In the latest example, the company was forced to halt its campaign to roll out iQOS after US officials ruled its technology infringed on two patents held by competitor RJ Reynolds. The Biden administration declined to intervene in the US International Trade Commission’s decision.

iQOS is manufactured overseas by sister company Philip Morris International and imported and marketed by Altria. The two divisions of Philip Morris split into separate companies in 2008.

Altria, which runs Philip Morris USA, said on Thursday it “does not expect to have access to IQOS devices” in 2022, but “remains focused on bringing IQOS back to market and working on reintegration plans. “.

Altria and Philip Morris International say they discussed several workarounds for the import ban, including moving production to the United States or redesigning the product. iQOS is sold in dozens of countries around the world, but the US launch has been limited to a handful of cities, amid intense scrutiny from US regulators and anti-corruption advocates. tobacco.

Altria’s investment in struggling vaping company Juul Labs faces even more challenges, including the possibility that health regulators will permanently ban it from the US market. The Food and Drug Administration is still debating whether it should remain a less harmful alternative for smokers.

Altria took a $13 billion stake in Juul in 2018, which has since been hit by a wave of lawsuits and local restrictions over underage use of its high-nicotine vaping pods. Altria now claims the investment is only worth $1.7 billion.

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This story includes material generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on MO at https://www.zacks.com/ap/MO

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