Winston-Salem-based Reynolds American Inc. will match a price increase by competing cigarette maker Altria Group Inc. , with both companies raising prices by 6 cents a pack on June 18 in the first hike of the year. The move follows two rounds of increases in 2011, and comes as state excise taxes have leveled off, according to the Wall Street Journal. Altria Group Inc. (NYSE: MO) announced its price move yesterday.
Greensboro-based Lorillard (NYSE: LO), which was among the cigarette makers who boosted prices last year, has yet to announce an increase this year, but analysts speculate such a hike could be coming. According to the Wall Street Journal, analysts have been pushing for price increases to help boost profitability as sales volumes decline. In April, both Lorillard and Reynolds American (NYSE: RAI) announced that profits were down for the first quarter, with Reynolds American reporting a 29 percent drop and Lorillard announcing profits were down 10 percent. Both cited declines in sales and smoking rates as reasons.
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