Philip Morris: Hiding Behind A New Name?

Philip Morris Inc., one of the world's biggest packaged-goods companies, is changing its name. In what one tobacco analyst calls "an attempt to put much of its difficult history behind it," the company will be known as Altria Group Inc., if shareholders approve the move. The company says the name change is an effort to "clarify the parent company identity" and says the new name derives from the Latin word "altus, which reflects the corporation's desire ... to always reach higher."

Critics dismiss the name change as a cynical ploy. "Philip Morris is changing its name because they have been unwilling to change their business practices and have been unable to improve their reputation," says Matthew Myers, president of the Campaign for Tobacco-Free Kids. "They are changing their name so that no one will identify them with who they really are." In recent years, Philip Morris and the rest of the U.S. tobacco industry has faced increasing legal and regulatory pressures. Despite such ongoing and costly problems, the company has continued to thrive financially.

Wall Street sees little impact on the bottom line. "I think it's an irrelevant move," says Martin Feldman, who follows Philip Morris for Salomon Smith Barney. "The company's problems are litigation and public-policy related. They have never been name related."

Philip Morris, which had $80 billion in operating revenues last year, owns such storied brands as Kraft cheese, Miller beer and the hugely profitable Marlboro cigarette brands. As an owner of highly recognizable brand names, the company is highly attuned to their power and symbolism. Operating companies, including Philip Morris USA and Kraft Foods, will retain their current names, the company says.