Altria Group Inc. MO posted mixed first-quarter 2025 results, wherein the top line declined year over year and missed the Zacks Consensus Estimate. The bottom line increased year over year and beat the consensus mark.
Altria’s traditional tobacco business delivered robust performance in a challenging first-quarter environment. In the oral tobacco products segment, on! continued to gain momentum in a competitive landscape. The company also reaffirmed its 2025 guidance for adjusted earnings per share (EPS).
Altria’s first-quarter adjusted earnings were $1.23 per share, which advanced 6% year over year and beat the Zacks Consensus Estimate of $1.17. The upside was driven by reduced shares outstanding, increased adjusted operating income (OCI) and a lower adjusted tax rate. These were somewhat offset by reduced income from equity investment in ABI and net periodic benefit income (excluding service cost). (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
The company posted net revenues of $5,259 million, which declined 5.7% year over year. There is a decrease in net revenues from the smokeable products segment. Revenues, net of excise taxes, fell 4.2% to $4,519 million. The top line missed the consensus mark, which was pegged at $4,638.2 million.
Zacks Investment Research
Image Source: Zacks Investment Research
Decoding Altria’s Segment-Wise Results
Smokeable Products: Net revenues in the category fell 5.8% year over year to $4,622 million due to reduced shipment volume. These were somewhat offset by higher pricing. Revenues, net of excise taxes, fell 4.1%.
Domestic cigarette shipment volumes tumbled 13.7% due to the industry’s decline rate, calendar differences and retail share losses. The industry’s decline was a result of persistent discretionary income challenges on Adult Tobacco Consumers (“ATC”) and increases in illegitimate e-vapor products. Altria’s reported cigar shipment volumes fell 2.9%.
Adjusted OCI in the segment jumped 2.7% to $2,518 million due to improved pricing, reduced SG&A costs and manufacturing costs. This was somewhat negated by reduced shipment volume. The adjusted OCI margins grew 4.2 percentage points to 64.4%.
Oral Tobacco Products: Net revenues in the segment rose 0.5% to $654 million. The upside was primarily driven by higher pricing, although this was partially offset by reduced shipment volume, increased percentage of on! shipment volume compared with MST year over year (mix change), along with increased promotional investments. Revenues excluding excise taxes rose by 0.5%.
Domestic shipment volumes fell 5% due to retail share losses and trade inventory movements, among other reasons. This was partly negated by the industry’s growth rate.
Adjusted OCI remained flat as increased pricing was largely offset by a decline in shipment volumes, changes in product mix and increased promotional spending. The adjusted OCI margin declined by 0.3 percentage points to 69.2%.
Altria Stock: Other Updates
This Zacks Rank #3 (Hold) company ended the quarter with cash and cash equivalents of $4,726 million, long-term debt of $23,428 million and a total stockholders’ deficit of $3,510 million.
In the first quarter of 2025, the company bought back 5.7 million shares, totaling $326 million. As of March 31, 2025, $674 million remained under its $1 billion authorized share repurchase program, which is likely to be completed by Dec. 31, 2025. Altria paid dividends worth $1.7 billion in the first quarter.
Altria Group, Inc. Price, Consensus and EPS Surprise
Altria Group, Inc. Price, Consensus and EPS Surprise
Altria Group, Inc. price-consensus-eps-surprise-chart | Altria Group, Inc. Quote
What to Expect From MO in 2025
The company expects 2025 adjusted earnings per share (EPS) in the range of $5.30 to $5.45, reflecting year-over-year growth of 2% to 5% from a base of $5.19 in 2024. Both the 2025 earnings guidance and the 2024 base exclude intangible asset amortization.
The company’s 2025 guidance reflects the currently estimated cost impact of increased tariffs, based on the most recent available information. It also assumes minimal disruption to combustible and e-vapor product volumes from ongoing enforcement actions targeting the illicit e-vapor market. In addition, the guidance range factors in the reinvestment of expected cost savings from the Optimize & Accelerate initiative, along with lower forecasted net periodic benefit income.
As the external landscape remains dynamic, Altria continues assessing economic factors like inflation, ATC dynamics (such as purchasing patterns and the adoption of smoke-free products), illegal e-vapor enforcement and regulatory developments.
The bottom-line view also considers planned investments associated with enhanced smoke-free product research, development and marketplace activities to support MO’s smoke-free products.
Shares of MO have gained 12.6% in the past three months compared with the industry’s 21.8% growth.
Three Solid Bets
United Natural Foods, Inc. UNFI distributes natural, organic, specialty, produce and conventional grocery and non-food products in the United States and Canada. At present, United Natural carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The consensus estimate for United Natural’s current fiscal-year sales and earnings implies growth of 1.9% and 485.7%, respectively, from the year-ago figures. UNFI delivered a trailing four-quarter earnings surprise of 408.7%, on average.
Utz Brands UTZ engages in the manufacture, marketing and distribution of snack foods in the United States and presently carries a Zacks Rank of 2. UTZ delivered a trailing four-quarter earnings surprise of 8.8%, on average.
The Zacks Consensus Estimate for Utz Brands’ current financial-year sales and earnings indicates growth of 1.4% and 10.4%, respectively, from the year-ago numbers.
Post Holdings, Inc. POST operates as a consumer-packaged goods holding company in the United States and internationally. It presently carries a Zacks Rank of 2. Post Holdings delivered a trailing four-quarter earnings surprise of 22.3%, on average.
The Zacks Consensus Estimate for Post Holdings’ current financial-year sales and earnings indicates growth of 0.3% and 2.2%, respectively, from the year-ago numbers.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
