In This Article:
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Adjusted Operating Companies Income (OCI) Growth: Smokeable products segment grew by 2.7%.
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Adjusted OCI Margins: Increased to 64.4%, up 4.2 percentage points year-over-year.
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Net Realization: Robust net realization of 10.8% in the smokeable products segment.
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Domestic Cigarette Volumes: Reported decline of 13.7%; adjusted decline of 12%.
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Oral Nicotine Pouches Shipment Volume: Grew to over 39 million cans, representing 18% growth.
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Oral Tobacco Products Segment Adjusted OCI: Over $400 million with margins at 69.2%.
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Oral Tobacco Products Segment Volume Decline: Estimated decline of approximately 1% when adjusted.
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Dividend Payments: Approximately $1.7 billion paid in the first quarter.
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Share Repurchases: 5.7 million shares repurchased for $326 million.
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Debt-to-EBITDA Ratio: 2.1 times as of March 31.
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2025 Full Year Adjusted Diluted EPS Guidance: Expected range of $5.30 to $5.45, representing 2% to 5% growth.
Release Date: April 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Altria Group Inc (NYSE:MO) reported solid adjusted operating income growth in its smokeable products segment, driven by the strength of the Marlboro brand.
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The oral tobacco products segment showed strong performance, with Helix's ON! brand growing its market share and shipment volume significantly.
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Altria Group Inc (NYSE:MO) continues to return strong cash to shareholders through dividends and share repurchases.
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The company is actively engaging with regulatory bodies and legislators to address the issue of illicit e-vapor products, which currently dominate the market.
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Altria Group Inc (NYSE:MO) maintains a strong balance sheet with a total debt-to-EBITDA ratio of 2.1 times, aligning with its target.
Negative Points
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Domestic cigarette volumes declined by 13.7% in the first quarter, with industry volumes also experiencing a decline.
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The e-vapor category faces significant challenges due to the prevalence of illicit products, which represent over 60% of the market.
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NJOY, a part of Altria Group Inc (NYSE:MO), has been impacted by ITC orders, leading to the discontinuation of NJOY ACE shipments.
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The oral tobacco products segment experienced a decline in retail share due to lower moist smokeless tobacco volumes.
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Economic pressures, including inflation, continue to impact consumer purchasing behavior, leading to increased demand for discount products.
Q & A Highlights
Q: Can you discuss the current state of the consumer and the impact of macroeconomic pressures on cigarette volume? A: William Gifford, CEO, explained that consumers are under pressure due to cumulative inflation impacts. While macroeconomic factors are significant, cross-category factors, especially illicit e-vapor products, are more impactful. Price is becoming a more prominent factor, though flavors remain the primary driver for consumer choices.