RICHMOND, Va. (AP) -- Altria Group Inc.'s fourth-quarter profit dropped 56 percent as the Marlboro maker sold fewer cigarettes and recorded charges related to paying off debt early.
Cigarette volumes for the owner of the nation's biggest cigarette maker, Philip Morris USA, fell about 6 percent during the quarter to 31.8 billion cigarettes.
Its top-selling Marlboro brand has been under pressure from competitors and lower-priced cigarette brands amid economic uncertainty and high unemployment.
That's 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.
"Consumer confidence generally is up but it's nowhere around where we'd like to see it," CEO Marty Barrington said in a conference call with investors. "We're always hopeful that the economy is going to improve for everyone. It's just hard to find a lot of drivers to cause us to believe that for the adult tobacco consumer (that) 2014 is going to look very much different than 2013."
But even as Marlboro volumes fell 5.7 percent, its share of the retail U.S. market rose 0.2 percentage points to 43.7 percent. And the company's share of the U.S. retail market rose 0.3 percentage points to 50.7 percent.
Adjusted volumes for Altria's smokeless tobacco brands such as Copenhagen and Skoal grew about 5 percent. Volumes for its Black & Mild cigars rose 8.5 percent.
The Richmond, Va., company reported that it earned $488 million, or 24 cents per share, down from $1.1 billion, or 55 cents a share, in the year-ago period.
Excluding one-time items, earnings were 57 cents per share, missing Wall Street expectations by a penny.
Altria said revenue, excluding excise taxes, fell 1 percent to $4.4 billion as higher prices helped offset a decline in volumes. Analysts polled by FactSet expected $4.5 billion.
Its shares fell 58 cents, or 1.6 percent, to $35.85 in morning trading Thursday. Its shares are up 6 percent over the past year.
Altria's full-year earnings rose 8.5 percent to $4.5 billion, or $2.26 per share. Revenue, excluding excise taxes, rose less than one percent to $17.7 billion. Adjusted full-year earnings were $2.38 per share.
The company also said Thursday it expects 2014 full-year adjusted earnings between $2.52 and $2.59 per share. Analysts expect $2.57 per share.
Altria also owns a wine business, holds a voting stake in brewer SABMiller, and has a financial services division.
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