16 avril 2009
Lucky Strike Cigarettes Green Has Gone to War
1997 'Lucky Lips' pin-up packs. George Washington Hill was president of The American Tobacco Company from 1925 until his death in 1946. The 1940's most successful advertising slogan, "Lucky Strike Cigarettes Green Has Gone to War!," was conceived by Mr. Hill while duck hunting on Monkey Island, North Carolina. Several days earlier Richard Boylan, head of purchasing for ATCo, had informed Hill that there was only a three months' supply of green ink available for printing Lucky Strike Cigarettes labels. Chromium, an element which is essential to solid green ink, was a war material in short supply. Boylan told Hill "Just like the soldiers, green ink has gone to war."
George Washington Hill knew that the green Lucky Strike Cigarettes package didn't appeal to women, but he needed a reason to change colors. When Hill found out that there was a shortage of merchant ships able to carry war supplies to England and Russia, and that older wood hulled ships were being pressed into service, he had his reason. Copper paint was used to protect the wooden hulls from marine worm damage, and Hill had just learned that copper was an ingredient in the ink needed for the gold bands on the Lucky Strike Cigarettes label.
Eureka! George Hill's new "Lucky Strike Cigarettes Green Has Gone to War!" advertising campaign touted the fact that enough bronze (copper and tin alloy) was saved each year to meet the requirements for 400 light tanks, those "speedy battering-rams of destruction!" Lord & Thomas, the Chicago advertising agency that promoted Lucky Strike Cigarettes, received a lot of hate mail because of the patriotic slogan. Critics felt patriotism was being exploited, but Lucky Strike Cigarettes sales did go up dramatically. The "Lucky Strike Cigarettes Green Has Gone to War!" campaign broke about the same time that
29 avril 2008
Czech Philip Morris market share down in 2007; high yr-end stocks to impact 2008
PRAGUE
The company also said high year-end 2007 stocks of cigarettes at old
excise rates will negatively impact the company's 2008 shipments in the Czech Republic
'Given the magnitude of the Jan. 1, 2008, excise tax increase, once
reflected in the selling price, we may witness a contraction of the Czech duty
paid cigarette market with a continued and even accelerated consumer shift to
lower priced products,' PMCR said in its annual report released on its website.
PMCR earned 1.97 billion crowns in consolidated net profit last year, up
3.3 percent, on a 3.4 percent rise in revenues to 10.4 billion crowns on the
back of higher shipments in both the Czech Republic Slovakia
'Assuming that there will not be another excise tax increase in 2009
that could trigger an inventory build-up in 2008, our shipments in 2008 will be
negatively impacted by the high 2007 year-end stocks of product at old excise
tax rates,' PMCR said.
The tobacco group's Czech market share has eroded in recent years amid
fiercer competition and tax hikes on cigarettes, and analysts expect the
company to face challenges in 2008 due to strong stockpiling from competitors.
22 avril 2008
Altria Versus Philip Morris International
A new star has joined the tiny universe of tobacco stocks. Altria spun off its overseas operations to shareholders on March 28, leaving Philip Morris International as the largest publicly traded tobacco company in the world. Only the state-owned China National Tobacco sells more cigarettes.
Although Philip Morris International has better prospects, you should consider owning both stocks, assuming you have no problems investing in tobacco. 
cigarettes companies can generate steady profits even in tough times, making the stocks ideal holdings in a weak economy.
The idea behind the split was to give Philip Morris International room to flourish. Existing shareholders of the widely held Altria received one share of Phillip Morris International for each share of Altria stock owned as of March 19. PM shareholders own a broadly diversified global tobacco company with strong opportunities for growth.
While tobacco use has waned for decades in the developed world, it is growing in China, Russia, India and other emerging nations. Philip Morris International, based in Lausanne, Switzerland, has just begun to exploit these key markets.
A beachhead in the tightly controlled Chinese tobacco market, the world's largest, gives PM an edge over competitors. It is the only cigarettes company that has struck a standing deal with Chinese National Tobacco.
That means PM can sell its popular Marlboro brand of cigarettes and other products in China. Stifel Nicholas analyst Chris Growe estimates that achievement of a modest 10% market share in China over the next ten years would add nearly two percentage points annually to PM's growth in sales volume.
The company has not yet done much with its Chinese ventures because management had to deal with the spinoff.
Now PM can make sure its agreement with China National Tobacco bears fruit. "It has the potential to be a significant part of the business and change the growth profile of the company," says Charles Norton, manager of the Vice Fund, which holds shares of both Altria and PM.
Beyond making inroads in China, PM's main task will be to push the Marlboro brand more overseas, Growe says. Marlboro is the dominant brand in the global tobacco market, with an 8.5% share excluding the Chinese market. That's four times the size of its largest rival.
Growe says new products, such as Marlboro Intense, Marlboro Filter Plus and Marlboro Fresh Mint, will give the brand more swagger internationally.
PM forecasts healthy earnings growth in 2008. Management says it thinks earnings per share will grow 12% to 14%, from $2.78 per share in 2007 (the $2.78 figure is pro forma -- that is, what PM would have earned last year if it were a separate company). Over the long-term, management expects to generate earnings growth of 10% to 12% a year.
The stock, which closed at $49.96 on April 18, is down 2% since the spinoff. It trades at 16 times the $3.20 per share that analysts, on average, expect the company to earn this year. Growe rates the stock a "buy" and thinks the shares are worth $58. Based on an annual dividend rate of $1.84, the stock yields 3.7%.