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Altria exceeded Q1 2025 earnings expectations despite declining shipment volumes in cigarettes and cigars across the industry. However, the company raised concerns about the growing dominance of unregulated vape products and is pushing for stricter enforcement and regulatory reforms to address the issue.
In its first earnings call of 2025, tobacco conglomerate Altria posted a robust performance, but highlighted unregulated vape products as a thorn in the side of the industry.
Altria, best known as the parent company of Marlboro cigarette maker Philip Morris USA and Black & Mild cigar manufacturer John Middleton, has identified transitioning customers to a smoke-free experience as one of its core missions.
However, the brand said it has needed to turn to politicians to ensure a crackdown on unauthorized, unregulated e-vaping products which are flooding the market.
On its earnings call earlier this week, Altria announced results that surpassed market expectations and reaffirmed its earnings per share (EPS) outlook for the year.
While net revenues were down 5.7% in Q1 compared to the same period last year, at $5.2 billion for the quarter ending March 2025, it still beat market expectations of around $4.6 billion.
Likewise, Altria posted adjusted EPS of $1.23 for Q1, compared to the $1.19 expected by the Street. It also confirmed the repurchase of 5.7m shares in the quarter, adding that it expects an EPS growth rate for the year of between 2% and 5% in 2024.
“Our highly profitable traditional tobacco businesses performed well in a challenging environment in the first quarter,” said Billy Gifford, Altria’s CEO. “The smokeable products segment delivered solid adjusted operating company income growth behind the strength of Marlboro."
That being said, the tobacco industry is changing with shifting consumer behaviors. When adjusted for inventory fluctuations, calendar differences, and other external factors, domestic cigarette shipment volumes dropped by 9%, Altria added.
Likewise, the reported shipment volumes for cigars dropped 2.9%, Altria added.
In the place of these tobacco products are vapes, which the Fortune500 company believes 2.6 million more consumers are using now compared to a year ago—bringing the total number of e-vapor users to more than 20 million people.
Altria is in the e-vapor sector following its acquisition of the NJOY vape brand in 2023, which was purchased for approximately $2.75 billion.
The company, based in Richmond, Virginia, is subject to the rulings of the Food & Drug Administration (FDA), but said its work was being undermined by a "flood" of illicit vapes flowing to the U.S. from China.