New York - Altria Group Inc, which spun off its overseas unit last month, Thursday reported an 11 per cent net income decline in the first quarter, due to the costs of shutting down its New York headquarters and the waning demand for cigarettes in the US.

But the company said it did better than had been expected on demand for Marlboro cigarettes and cigars.

Net income was 2.45 billion dollars, down from 2.75 billion dollars a year ago.

Spinning off its international division sent two-thirds of profit overseas, leaving Altria dependent on the shrinking US cigarette market.

Altria increased its top-selling Marlboro's share of US smokers to 41.5 per cent.

The company raised prices in September and January with a reduction of discounts on Marlboro, Virginia Slims, Parliament and several other brands, Bloomberg financial news agency reported.

Americans are smoking 1 to 2 per cent fewer cigarettes a year as smoking bans and rising prices crimp demand. (dpa)