In the past quarter, cigarette sales for tobacco giant Philip Morris, with brands like Marlboro, L&M and Chesterfield, dropped 11.5 % and turnover dropped 1.4 %, although profit did grow 4 %.
“Relatively weak quarter”
“It is extremely encouraging that 1.8 million consumers have stopped smoking and have switched to our “heat-not-burn” alternative IQOS, despite our capacity limitations”, CEO Andre Calatzopoulos said. IOS is an smoke-free tobacco product that does not burn the tobacco, but only heats it. That results in an experience without smoke, tar or carbon monoxide. Basically, the “smoker” only inhales tobacco fumes.
Despite IQOS’ relative success, Philip Morris cannot balance out the classic cigarette’s sales slump, down more than 10 %. Even price increases could not keep turnover afloat: its income dropped 1.4 % to 17 billion dollars (16 billion euro).
Net profit did increase 4 % to 1.59 billion dollars (1.5 billion euro), even though that was still below analysts’ expectations. “Our results were in line with our previously communicated expectation of a relatively weak first quarter”, CEO André Calantzopoulos admitted.
