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Altria Q2 earnings top estimates, narrows full-year profit outlook
Proactiveinvestors NA· 2025-07-30 16:56
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Compared to Estimates, Altria (MO) Q2 Earnings: A Look at Key Metrics
ZACKS· 2025-07-30 14:36
Core Insights - Altria reported revenue of $5.29 billion for the quarter ended June 2025, reflecting a 0.3% increase year-over-year and surpassing the Zacks Consensus Estimate of $5.19 billion by 1.93% [1] - The company's EPS for the quarter was $1.44, up from $1.31 in the same quarter last year, exceeding the consensus estimate of $1.37 by 5.11% [1] Revenue Breakdown - Smokeable Products generated revenues net of excise taxes of $4.57 billion, slightly above the estimated $4.43 billion, but down 0.4% from the previous year [4] - Oral tobacco products reported revenues net of excise taxes of $728 million, exceeding the estimated $701.72 million, marking a 6% increase year-over-year [4] - The segment "All Other/Financial Services" reported a net revenue of -$8 million, significantly below the estimated $14 million, representing a drastic year-over-year decline of 366.7% [4] Operating Income - Adjusted Operating Income (OCI) for Smokeable Products was $2.95 billion, surpassing the average estimate of $2.86 billion [4] - The Operating Income for Oral tobacco products was $498 million, exceeding the average estimate of $459.6 million [4] - The Operating Loss for "All Other/Financial Services" was reported at -$108 million, closely aligning with the average estimate of -$108.5 million [4] Stock Performance - Altria's shares have returned +2.1% over the past month, compared to a +3.4% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]
Altria(MO) - 2025 Q2 - Earnings Call Transcript
2025-07-30 14:02
Financial Data and Key Metrics Changes - Adjusted diluted earnings per share increased by 8.3% to $1.44 in the second quarter and by 7.2% for the first half [19] - Adjusted operating companies income in the Smokable Products segment grew by 4.2% to $2.9 billion in the second quarter and by 3.5% to $5.5 billion in the first half [19] - Adjusted OCI margins expanded to 64.5% for both the second quarter and the first half [20] Business Line Data and Key Metrics Changes - In the Smokable Products segment, domestic cigarette volumes declined by 10.2% in the second quarter and 11.9% for the first half [20] - Oral nicotine pouches, particularly ON!, reported a shipment volume increase of 26.5% to 52.1 million cans in the second quarter [11] - Adjusted OCI for the Oral Tobacco Products segment grew by 10.9% in the second quarter and 5.5% in the first half [23] Market Data and Key Metrics Changes - The e-vapor category included over 20.5 million vapers, up by over 1.9 million year over year [14] - Disposable vapers increased by an estimated 2.7 million to approximately 14.4 million, representing over 60% of the e-vapor category [14] - Domestic cigarette volumes at the industry level declined by an estimated 8.5% in the second quarter [20] Company Strategy and Development Direction - The company aims to shape a fully regulated industry and provide expanded product choices for adult nicotine consumers [8] - Continued focus on driving trial, building long-term equity, and increasing profitability in the ON! brand [12] - The company is actively exploring potential next steps regarding the nJoy e-vapor product line, including an appeal against patent disputes [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong performance of operating companies despite challenging market conditions [18] - The macroeconomic environment remains dynamic, with inflation and consumer confidence being key factors to monitor [32] - The company raised the lower end of its 2025 guidance range, expecting adjusted diluted EPS in the range of $5.35 to $5.45 [25] Other Important Information - The company returned over $4 billion to shareholders through dividends and share repurchases in the first half of the year [8] - The total debt to EBITDA ratio as of June 30 was 2.0 times, in line with the target [26] - The company is advocating for more coordinated actions against illicit e-vapor products to clean up the marketplace [16] Q&A Session Summary Question: Insights on the raised guidance range and consumer environment - Management highlighted the dynamic market and the need to monitor adult tobacco consumer behaviors due to inflationary pressures [31] Question: Update on nJoy e-vapor product development - Management confirmed that product development for the nJoy ACE device is progressing, with plans to file for FDA approval [35] Question: Long-term EPS growth outlook - Management remains confident in achieving mid-single-digit EPS growth through FY 2028, despite economic strains on consumers [44] Question: Strategy for the Basic brand - The company is using targeted analytics to maintain consumer loyalty and expand the Basic brand's presence in discount segments [49] Question: Impact of illicit vape crackdowns - Management noted that while enforcement actions are increasing, it is too early to determine their overall impact on the market [58] Question: Tariff impacts on business - Tariffs have had some impact on costs, particularly in supply chain materials, but are not viewed as material to overall business performance [98]
Altria(MO) - 2025 Q2 - Earnings Call Transcript
2025-07-30 14:00
Financial Data and Key Metrics Changes - Adjusted diluted earnings per share increased by 8.3% to $1.44 in Q2 2025 and by 7.2% for the first half, driven by robust adjusted operating companies income growth and share repurchases [19][25] - Adjusted operating companies income for the Smokable Products segment grew by 4.2% to $2.9 billion in Q2 and by 3.5% to $5.5 billion in the first half [19][20] - Adjusted OCI margins expanded to 64.5% for both Q2 and the first half [20] Business Line Data and Key Metrics Changes - Oral nicotine pouches, particularly ON!, were the primary growth driver, with reported shipment volume increasing by 26.5% to 52.1 million cans year-over-year [9][23] - Domestic cigarette volumes in the Smokable Products segment declined by 10.2% in Q2 and 11.9% for the first half, with adjusted estimates showing declines of approximately 10.5% [20][21] - The Oral Tobacco Products segment saw adjusted OCI grow by 10.9% in Q2, primarily driven by ON!'s strong performance [23] Market Data and Key Metrics Changes - The e-vapor category included over 20.5 million vapers, up by 1.9 million year-over-year, with disposable vapers increasing to approximately 14.4 million [14][15] - The flavored disposable market continues to drive e-vapor category growth, representing over 60% of the category [15][16] Company Strategy and Development Direction - The company is focused on shaping a fully regulated industry and expanding product choices for adult nicotine consumers, while also advocating for enforcement against unregulated products [7][14] - The strategy includes targeted launches and promotions for the Basic brand to retain consumers in the portfolio while addressing macroeconomic pressures [21][49] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong performance of operating companies despite challenging market conditions and inflationary pressures [18][32] - The company raised the lower end of its 2025 guidance range, expecting adjusted diluted EPS to be in the range of $5.35 to $5.45, reflecting a growth rate of 3% to 5% from 2024 [25][26] Other Important Information - The company returned significant value to shareholders, paying approximately $3.5 billion in dividends and repurchasing 10.4 million shares for $600 million in the first half of the year [26][27] - The total debt to EBITDA ratio as of June 30 was 2.0 times, in line with the target [27] Q&A Session Summary Question: Discussion on the raised guidance range and expectations for the second half - Management acknowledged the strong first half results and the dynamic market conditions, emphasizing the need to monitor consumer behavior amid inflation [30][32] Question: Update on nJoy e-vapor product development - Management confirmed that product development for the new nJoy device is progressing, with plans to file for FDA approval once ready [34][36] Question: Long-term EPS growth outlook - Management remains confident in achieving mid-single-digit EPS growth through FY 2028, despite current economic strains on consumers [43][44] Question: Strategy for the Basic brand and discount share - The company is strategically repositioning Basic as a discount brand while using data analytics to target consumers effectively [49][50] Question: Impact of enforcement on illicit vapes and cigarette volumes - Management noted that while enforcement actions are increasing, it is too early to determine their full impact on the market [55][58] Question: Clarification on tariff impacts - Management indicated that while tariffs have affected costs, they do not view them as material to overall business performance [96][97]
Altria (MO) Q2 Earnings and Revenues Surpass Estimates
ZACKS· 2025-07-30 13:11
Altria shares have added about 13.5% since the beginning of the year versus the S&P 500's gain of 8.3%. What's Next for Altria? Altria (MO) came out with quarterly earnings of $1.44 per share, beating the Zacks Consensus Estimate of $1.37 per share. This compares to earnings of $1.31 per share a year ago. These figures are adjusted for non- recurring items. This quarterly report represents an earnings surprise of +5.11%. A quarter ago, it was expected that this owner of Philip Morris USA, the nation's large ...
Altria(MO) - 2025 Q2 - Earnings Call Presentation
2025-07-30 13:00
Altria's Second-Quarter and First-Half 2025 Earnings Conference Call July 30, 2025 1 | ALCS | Q2 2025 | 7.30.25 | For Investor Purposes ONLY Safe Harbor Statement Statements, including earnings guidance, in this presentation that are not reported financial results or other historical information are "forward-looking statements" within the meaning of Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current plans, estimates and expectations, and are not guarantees ...
Altria(MO) - 2025 Q2 - Quarterly Report
2025-07-30 11:22
PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Altria Group, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of earnings, comprehensive earnings, stockholders' equity, and cash flows, along with detailed notes explaining accounting policies, significant transactions, and financial position [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :----- | :-------------------------- | :------------------------------ | | Total Assets | $32,332 | $35,177 | | Total Liabilities | $35,538 | $37,365 | | Total Stockholders' Equity (Deficit) | $(3,206) | $(2,188) | | Cash and cash equivalents | $1,287 | $3,127 | | Goodwill | $6,072 | $6,945 | [Condensed Consolidated Statements of Earnings](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings) | Metric | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | Change (in millions) | % Change | | :----- | :----------------------------------------- | :----------------------------------------- | :------------------- | :------- | | Net revenues | $11,361 | $11,785 | $(424) | (3.6)% | | Gross profit | $7,099 | $6,955 | $144 | 2.1% | | Operating income | $5,018 | $5,207 | $(189) | (3.6)% | | Net earnings | $3,455 | $5,932 | $(2,477) | (41.8)% | | Basic and diluted EPS | $2.04 | $3.41 | $(1.37) | (40.2)% | - The significant decrease in net earnings and EPS for the six months ended June 30, 2025, was primarily due to the absence of the **$2.7 billion** gain on the sale of IQOS System commercialization rights recorded in 2024 and an **$873 million** impairment of e-vapor reporting unit goodwill in 2025[16](index=16&type=chunk)[47](index=47&type=chunk)[52](index=52&type=chunk) [Condensed Consolidated Statements of Comprehensive Earnings](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Earnings) | Metric | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | Change (in millions) | % Change | | :----- | :----------------------------------------- | :----------------------------------------- | :------------------- | :------- | | Net earnings | $3,455 | $5,932 | $(2,477) | (41.8)% | | Other comprehensive earnings (losses), net of deferred income taxes | $(431) | $390 | $(821) | (210.5)% | | Comprehensive earnings | $3,024 | $6,322 | $(3,298) | (52.2)% | [Condensed Consolidated Statements of Stockholders' Equity (Deficit) for the Six Months Ended June 30, 2025 and 2024](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Deficit)%20for%20the%20Six%20Months%20Ended%20June%2030,%202025%20and%202024) | Metric | December 31, 2024 (in millions) | June 30, 2025 (in millions) | Change (in millions) | | :----- | :------------------------------ | :-------------------------- | :------------------- | | Balances, Total Stockholders' Equity (Deficit) | $(2,188) | $(3,206) | $(1,018) | | Net earnings | $3,455 | N/A | N/A | | Other comprehensive earnings (losses) | $(431) | N/A | N/A | | Cash dividends declared | $(3,446) | N/A | N/A | | Repurchases of common stock | $(600) | N/A | N/A | [Condensed Consolidated Statements of Stockholders' Equity (Deficit) for the Three Months Ended June 30, 2025 and 2024](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Deficit)%20for%20the%20Three%20Months%20Ended%20June%2030,%202025%20and%202024) | Metric | March 31, 2025 (in millions) | June 30, 2025 (in millions) | Change (in millions) | | :----- | :--------------------------- | :-------------------------- | :------------------- | | Balances, Total Stockholders' Equity (Deficit) | $(3,460) | $(3,206) | $254 | | Net earnings | $2,378 | N/A | N/A | | Other comprehensive earnings (losses) | $(140) | N/A | N/A | | Cash dividends declared | $(1,721) | N/A | N/A | | Repurchases of common stock | $(274) | N/A | N/A | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Activity | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | Change (in millions) | | :----------------- | :----------------------------------------- | :----------------------------------------- | :------------------- | | Net cash provided by (used in) operating activities | $2,925 | $2,802 | $123 | | Net cash provided by (used in) investing activities | $(79) | $2,279 | $(2,358) | | Net cash provided by (used in) financing activities | $(4,693) | $(6,966) | $2,273 | | Cash, cash equivalents and restricted cash at end of period | $1,311 | $1,836 | $(525) | - The significant change in investing activities is primarily due to the **$2,353 million** proceeds from the ABI Transaction in the first six months of 2024, which did not recur in 2025[25](index=25&type=chunk)[351](index=351&type=chunk) - The decrease in cash used in financing activities is mainly attributable to lower common stock repurchases (**$600 million** in 2025 vs **$2,410 million** in 2024) and the issuance of **$997 million** in long-term debt in 2025[28](index=28&type=chunk)[36](index=36&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [Note 1. Background and Basis of Presentation](index=11&type=section&id=Note%201.%20Background%20and%20Basis%20of%20Presentation) This note outlines Altria's corporate structure, including its wholly-owned subsidiaries (PM USA, Middleton, USSTC, Helix, NJOY) and investments (Horizon, ABI, Cronos); it also details share repurchase programs, with a new **$1.0 billion** program authorized in January 2025, and confirms the unaudited interim financial statements conform to GAAP - Altria's wholly-owned subsidiaries include leading manufacturers of combustible products (PM USA, Middleton) and smoke-free products (USSTC, Helix, NJOY)[31](index=31&type=chunk) - A new **$1.0 billion** share repurchase program was authorized in January 2025, expected to be completed by December 31, 2025, with **$400 million** remaining at June 30, 2025[34](index=34&type=chunk) | Share Repurchase Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------ | :----------------------------- | :----------------------------- | | Total number of shares repurchased (millions) | 10.4 | 54.1 | | Aggregate cost of shares repurchased (millions) | $600 | $2,410 | | Average price per share | $57.71 | $44.50 | [Note 2. Revenues from Contracts with Customers](index=12&type=section&id=Note%202.%20Revenues%20from%20Contracts%20with%20Customers) Altria disaggregates net revenues by product type and records receivables net of cash discounts; deferred revenue is recognized when payments are received in advance of product shipment, typically satisfied within three days; an allowance for returned goods, primarily for USSTC's MST products, is recorded as a reduction to revenues | (in millions) | June 30, 2025 | December 31, 2024 | | :------------ | :------------ | :---------------- | | Receivables | $241 | $177 | | Deferred revenue | $213 | $215 | - The company records an allowance for returned goods, primarily for USSTC's MST products with limited shelf life, based on historical volume and return rates[41](index=41&type=chunk) [Note 3. Supplier Financing](index=13&type=section&id=Note%203.%20Supplier%20Financing) Altria facilitates a voluntary supplier financing program through a third-party intermediary; outstanding obligations under this program are recorded in accounts payable and included in operating activities | (in millions) | June 30, 2025 | December 31, 2024 | | :------------ | :------------ | :---------------- | | Confirmed outstanding obligations | $152 | $128 | [Note 4. Goodwill and Other Intangible Assets, net](index=13&type=section&id=Note%204.%20Goodwill%20and%20Other%20Intangible%20Assets,%20net) Goodwill decreased by **$873 million** to **$6,072 million** at June 30, 2025, primarily due to a non-cash impairment of the e-vapor reporting unit goodwill in Q1 2025; other intangible assets, net, also slightly decreased; the company performs annual impairment reviews and more frequent assessments if triggering events occur | (in millions) | June 30, 2025 | December 31, 2024 | | :------------ | :------------ | :---------------- | | Goodwill | $6,072 | $6,945 | | Other intangible assets, net | $12,900 | $12,973 | - A non-cash goodwill impairment of **$873 million** was recorded for the e-vapor reporting unit in Q1 2025, primarily due to lower projected volume and revenue following the ITC's exclusion order on NJOY ACE[51](index=51&type=chunk)[52](index=52&type=chunk) - In Q2 2024, a non-cash, pre-tax impairment of **$354 million** was recorded for the Skoal trademark due to its estimated fair value falling below carrying value[55](index=55&type=chunk) [Note 5. Exit and Implementation Costs](index=15&type=section&id=Note%205.%20Exit%20and%20Implementation%20Costs) Altria initiated a multi-phase "Optimize & Accelerate" initiative in October 2024 to modernize operations, expecting total pre-tax charges of approximately **$125 million**; as of June 30, 2025, **$98 million** in charges have been incurred, primarily for employee separation and implementation costs - The "Optimize & Accelerate" initiative, launched in October 2024, aims to increase organizational speed, efficiency, and effectiveness[57](index=57&type=chunk) - Total estimated pre-tax charges for the initiative are approximately **$125 million**, with **$98 million** incurred as of June 30, 2025, consisting of **$36 million** for employee separation and **$62 million** for implementation costs[58](index=58&type=chunk) | (in millions) | Balances at December 31, 2024 | Charges (Six Months Ended June 30, 2025) | Cash paid (Six Months Ended June 30, 2025) | Balances at June 30, 2025 | | :------------ | :---------------------------- | :--------------------------------------- | :----------------------------------------- | :------------------------ | | Exit Costs | $35 | $1 | $(5) | $31 | | Implementation Costs | $22 | $29 | $(33) | $18 | | Total | $57 | $30 | $(38) | $49 | [Note 6. Investments in Equity Securities](index=15&type=section&id=Note%206.%20Investments%20in%20Equity%20Securities) Altria holds significant equity investments in ABI (approx **8.1%** ownership) and Cronos (approx **40.8%** ownership), accounted for under the equity method; income from these investments was unfavorable for the six months ended June 30, 2025, compared to 2024, primarily due to the 2024 gain from the ABI Transaction | (in millions) | June 30, 2025 | December 31, 2024 | | :------------ | :------------ | :---------------- | | ABI | $7,837 | $7,880 | | Cronos | $306 | $315 | | Total | $8,143 | $8,195 | | (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------ | :----------------------------- | :----------------------------- | | (Income) losses from investments in equity securities | $(291) | $(414) | | ABI | $(273) | $(434) | | Cronos | $(18) | $20 | - The 2024 ABI Transaction involved the sale of **38.3 million** ABI ordinary shares for approximately **$2.4 billion** in gross proceeds, resulting in a pre-tax gain of **$103 million**[66](index=66&type=chunk)[69](index=69&type=chunk) [Note 7. Financial Instruments](index=17&type=section&id=Note%207.%20Financial%20Instruments) Altria manages foreign currency exchange risk on its ABI investment using Euro-denominated long-term notes as net investment hedges; the fair value of total long-term debt decreased from **$22,741 million** at December 31, 2024, to **$22,979 million** at June 30, 2025; contingent payments related to the NJOY Transaction are recognized at fair value, with changes impacting earnings | (in millions) | June 30, 2025 | December 31, 2024 | | :------------ | :------------ | :---------------- | | Carrying value of total long-term debt | $24,720 | $24,926 | | Fair value of total long-term debt | $22,979 | $22,741 | - Pre-tax (gains) losses from net investment hedges were **$403 million** for the six months ended June 30, 2025, compared to **$(98) million** in 2024[75](index=75&type=chunk) - Contingent payments for the NJOY Transaction, tied to FDA authorizations for menthol, blueberry, and watermelon pod products, had a balance of **$45 million** at June 30, 2025[78](index=78&type=chunk) [Note 8. Benefit Plans](index=18&type=section&id=Note%208.%20Benefit%20Plans) Net periodic benefit cost (income) for pension plans was **$(11) million** for the six months ended June 30, 2025, an improvement from **$(35) million** in 2024; postretirement plans showed a cost of **$6 million**, compared to **$15 million** in 2024; Altria made **$9 million** in pension plan contributions and anticipates up to **$20 million** more in 2025 | (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------ | :----------------------------- | :----------------------------- | | Net periodic benefit cost (income) - Pension | $(11) | $(35) | | Net periodic benefit cost (income) - Postretirement | $6 | $15 | - Employer contributions of **$9 million** were made to pension plans during the first six months of 2025, with additional contributions of up to **$20 million** anticipated for the remainder of 2025[80](index=80&type=chunk) [Note 9. Earnings per Share](index=19&type=section&id=Note%209.%20Earnings%20per%20Share) Basic and diluted EPS for the six months ended June 30, 2025, were **$2.04**, down from **$3.41** in the prior year, reflecting lower net earnings partially offset by fewer weighted-average shares outstanding | (in millions, except per share data) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Net earnings | $3,455 | $5,932 | | Earnings for basic and diluted EPS | $3,445 | $5,918 | | Weighted-average shares for basic and diluted EPS | 1,687 | 1,738 | | Basic and diluted earnings per share | $2.04 | $3.41 | [Note 10. Other Comprehensive Earnings/Losses](index=19&type=section&id=Note%2010.%20Other%20Comprehensive%20Earnings/Losses) Accumulated other comprehensive losses, net of deferred income taxes, attributable to Altria increased from **$(2,400) million** at December 31, 2024, to **$(2,831) million** at June 30, 2025; this change was primarily driven by other comprehensive losses related to ABI and currency translation adjustments | (in millions) | Balances, December 31, 2024 | Balances, June 30, 2025 | Change (in millions) | | :------------ | :-------------------------- | :---------------------- | :------------------- | | Accumulated Other Comprehensive Losses | $(2,400) | $(2,831) | $(431) | | Other comprehensive earnings (losses) before reclassifications, net of deferred income taxes | $(412) | N/A | N/A | | Amounts reclassified to net earnings, net of deferred income taxes | $(19) | N/A | N/A | - The increase in accumulated other comprehensive losses was mainly due to ABI-related items and currency translation adjustments[82](index=82&type=chunk)[84](index=84&type=chunk) [Note 11. Segment Reporting](index=21&type=section&id=Note%2011.%20Segment%20Reporting) Altria's reportable segments are smokeable products and oral tobacco products; segment operating companies income (OCI) is used by the CODM for performance evaluation; for the six months ended June 30, 2025, smokeable products OCI increased, while oral tobacco products OCI significantly increased due to the absence of the Skoal trademark impairment in 2025 - Reportable segments are smokeable products (cigarettes, machine-made large cigars) and oral tobacco products (MST, oral nicotine pouches)[85](index=85&type=chunk) | (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (in millions) | % Change | | :------------ | :----------------------------- | :----------------------------- | :------------------- | :------- | | Net revenues: Smokeable products | $9,979 | $10,401 | $(422) | (4.1)% | | Net revenues: Oral tobacco products | $1,407 | $1,362 | $45 | 3.3% | | OCI: Smokeable products | $5,399 | $5,246 | $153 | 2.9% | | OCI: Oral tobacco products | $931 | $532 | $399 | 75.0% | | OCI: All other | $(1,122) | $(172) | $(950) | (552.3)% | - The significant increase in oral tobacco products OCI for the six months ended June 30, 2025, was primarily due to the non-cash impairment of the Skoal trademark (**$354 million**) recorded in 2024, which did not recur in 2025[88](index=88&type=chunk)[319](index=319&type=chunk) [Note 12. Debt](index=23&type=section&id=Note%2012.%20Debt) Altria's total long-term debt decreased slightly to **$24.7 billion** at June 30, 2025, from **$24.9 billion** at December 31, 2024; the company repaid **$1,607 million** in senior unsecured notes and issued **$1.0 billion** in new notes in Q1 2025, increasing the weighted-average coupon interest rate to approximately **4.5%** - Total long-term debt was **$24.7 billion** at June 30, 2025, down from **$24.9 billion** at December 31, 2024[95](index=95&type=chunk) - In Q1 2025, **$1.0 billion** in U.S. dollar denominated senior unsecured notes were issued, and **$1,607 million** in notes were repaid in Q2 2025[95](index=95&type=chunk)[96](index=96&type=chunk) - The weighted-average coupon interest rate on total long-term debt increased to approximately **4.5%** at June 30, 2025, from approximately **4.3%** at December 31, 2024[340](index=340&type=chunk) [Note 13. Income Taxes](index=24&type=section&id=Note%2013.%20Income%20Taxes) The income tax rate for the six months ended June 30, 2025, was **28.0%**, up from **24.5%** in 2024, primarily due to the non-deductible impairment of e-vapor reporting unit goodwill and state tax expense; the 2024 rate included a benefit from the partial release of a valuation allowance related to the ABI Transaction | (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------ | :----------------------------- | :----------------------------- | | Earnings before income taxes | $4,801 | $7,855 | | Provision for income taxes | $1,346 | $1,923 | | Income tax rate | 28.0% | 24.5% | - The higher income tax rate in 2025 was primarily due to the non-deductible impairment of the e-vapor reporting unit goodwill and state tax expense[98](index=98&type=chunk) - The 2024 income tax rate benefited from the partial release of a valuation allowance against a deferred tax asset associated with JUUL losses, due to the capital gain on the ABI Transaction[99](index=99&type=chunk) [Note 14. Contingencies](index=25&type=section&id=Note%2014.%20Contingencies) Altria and its subsidiaries face various legal proceedings, including tobacco-related litigation (smoking and health, health care cost recovery, e-vapor cases) and other matters; the company records provisions for probable and estimable losses, but generally cannot estimate possible losses for pending cases; significant e-vapor patent infringement litigation involving NJOY ACE resulted in an ITC exclusion order effective March 31, 2025 - Altria and its subsidiaries are defendants in numerous legal proceedings, including individual smoking and health cases (**195 pending**), health care cost recovery actions (**1 pending**), and e-vapor cases (**24 pending** as of July 28, 2025)[102](index=102&type=chunk)[113](index=113&type=chunk) - An ITC exclusion order and cease-and-desist orders prohibiting the importation and sale of NJOY ACE in the U.S. became effective March 31, 2025, due to patent infringement; Altria has appealed this decision[159](index=159&type=chunk)[160](index=160&type=chunk) | (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------ | :----------------------------- | :----------------------------- | | Accrued liability for tobacco and health and certain other litigation items at beginning of period | $96 | $346 | | Pre-tax charges for tobacco and health and certain other litigation | $40 | $38 | | Payments | $(46) | $(263) | | Accrued liability at end of period | $95 | $151 | [Note 15. New Accounting Guidance Not Yet Adopted](index=35&type=section&id=Note%2015.%20New%20Accounting%20Guidance%20Not%20Yet%20Adopted) This note describes new accounting guidance applicable to Altria but not yet adopted, including ASU No 2023-09 on Income Tax Disclosures (effective 2025) and ASU Nos 2024-03 and 2025-01 on Income Statement Expense Disaggregation Disclosures (effective 2026/2027) - ASU No 2023-09 (Income Taxes) will require expanded income tax disclosures, effective for fiscal years beginning after December 15, 2024[181](index=181&type=chunk) - ASU Nos 2024-03 and 2025-01 (Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures) will require additional disclosures about specific types of expenses, effective for fiscal years beginning after December 15, 2026[181](index=181&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Altria's financial condition and results of operations, discussing key business trends, consolidated and segment-level performance, liquidity, capital resources, critical accounting estimates, non-GAAP financial measures, and significant risk factors [Executive Summary](index=36&type=section&id=Executive%20Summary) - Altria's vision is "Moving Beyond Smoking™" by transitioning adult smokers to a smoke-free future and exploring new growth opportunities[185](index=185&type=chunk) - The company's portfolio includes leading combustible brands (Marlboro, Black & Mild) and smoke-free brands (Copenhagen, Skoal, on!, NJOY)[186](index=186&type=chunk)[187](index=187&type=chunk)[188](index=188&type=chunk) - U.S. adult tobacco consumers face discretionary income pressures due to inflation, leading to increased discount brand share (**31.2% in Q2 2025**, up **1.9 share points YoY**) and a shift to smoke-free products[190](index=190&type=chunk)[191](index=191&type=chunk) - Flavored disposable e-vapor products, largely unregulated, represent over **60%** of the e-vapor category, posing a significant challenge[193](index=193&type=chunk) [Non-GAAP Financial Measures](index=39&type=section&id=Non-GAAP%20Financial%20Measures) - Non-GAAP measures (adjusted OCI, net earnings, diluted EPS) exclude special items like asset impairment, acquisition/disposition costs, and amortization of intangibles to provide insight into underlying business trends[204](index=204&type=chunk) - Effective Q1 2025, amortization of intangibles is now treated as a special item and excluded from adjusted financial measures, a change from prior periods[205](index=205&type=chunk) [Discussion and Analysis](index=40&type=section&id=Discussion%20and%20Analysis) [Critical Accounting Estimates](index=40&type=section&id=Critical%20Accounting%20Estimates) Altria's critical accounting estimates include goodwill and other intangible assets impairment testing, with a **$873 million** e-vapor goodwill impairment in Q1 2025 and potential future impairment for the Skoal trademark - A non-cash goodwill impairment of **$873 million** was recorded for the e-vapor reporting unit in Q1 2025, driven by lower projected volume and revenue due to the NJOY ACE import and sale prohibition[209](index=209&type=chunk)[52](index=52&type=chunk) - The fair value of the e-vapor reporting unit was estimated using an income approach with discount rates ranging from **12.0% to 15.0%**, sensitive to regulatory and market outcomes[210](index=210&type=chunk) - A hypothetical **1%** increase in the discount rate for the e-vapor reporting unit would have resulted in an additional **$275 million** goodwill impairment in Q1 2025[213](index=213&type=chunk) - The Skoal trademark, which had an estimated fair value exceeding its carrying value by approximately **7%** at December 31, 2024, remains susceptible to future impairment if sales volume declines are higher than currently estimated[214](index=214&type=chunk)[215](index=215&type=chunk) [Consolidated Operating Results](index=42&type=section&id=Consolidated%20Operating%20Results) For the six months ended June 30, 2025, reported net revenues decreased by **3.6%** to **$11,361 million** and net earnings by **41.8%** to **$3,455 million** due to the IQOS gain absence and e-vapor impairment, while adjusted net earnings increased by **4.3%** to **$4,522 million** and adjusted diluted EPS by **7.2%** to **$2.67** | Metric | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | % Change | | :----- | :----------------------------------------- | :----------------------------------------- | :------- | | Net Revenues | $11,361 | $11,785 | (3.6)% | | Operating Income | $5,018 | $5,207 | (3.6)% | | Net Earnings | $3,455 | $5,932 | (41.8)% | | Diluted EPS | $2.04 | $3.41 | (40.2)% | | Adjusted Net Earnings | $4,522 | $4,334 | 4.3% | | Adjusted Diluted EPS | $2.67 | $2.49 | 7.2% | - The significant decline in reported net earnings and EPS was largely due to the **$2.7 billion** gain on IQOS System commercialization rights in 2024 and the **$873 million** e-vapor goodwill impairment in 2025[221](index=221&type=chunk)[228](index=228&type=chunk) - Adjusted net earnings and diluted EPS increased due to higher OCI and a lower adjusted tax rate, partially offset by lower income from the ABI equity investment and higher interest expense[229](index=229&type=chunk) [Operating Results by Business Segment](index=46&type=section&id=Operating%20Results%20by%20Business%20Segment) [Business Environment](index=46&type=section&id=Business%20Environment) The U.S. tobacco industry faces ongoing challenges from litigation, FDA regulations, illicit e-vapor trade, excise tax increases, and macroeconomic conditions, impacting sales volumes and market dynamics - The FSPTCA grants the FDA broad regulatory authority over tobacco products, including pre-market review pathways, advertising restrictions, and potential product standards (e.g., maximum nicotine levels, flavor bans)[237](index=237&type=chunk)[241](index=241&type=chunk)[267](index=267&type=chunk) - Illicit flavored disposable e-vapor products represent over **60%** of the e-vapor category, evading regulatory processes and negatively impacting lawful businesses[193](index=193&type=chunk)[290](index=290&type=chunk) - Tobacco products are subject to substantial and increasing excise taxes at federal, state, and local levels, which adversely impact sales volumes and encourage shifts to lower-priced or illicit products[269](index=269&type=chunk)[273](index=273&type=chunk) - Supply chain disruptions, geopolitical instability, and climate change can increase costs or reduce the supply/quality of tobacco and other raw materials, posing risks to manufacturing and profitability[294](index=294&type=chunk)[296](index=296&type=chunk) [Operating Results](index=57&type=section&id=Operating%20Results) This section details the operating results for Altria's Smokeable Products and Oral Tobacco Products segments, including net revenues, OCI, shipment volumes, and retail share performance, highlighting the impact of pricing actions, industry trends, and competitive dynamics [Smokeable Products Segment](index=57&type=section&id=Smokeable%20Products%20Segment) For the six months ended June 30, 2025, smokeable products net revenues decreased by **4.1%** to **$9,979 million** due to an **11.9%** decline in cigarette shipment volume, while reported OCI increased by **2.9%** to **$5,399 million** driven by pricing, with Marlboro's retail share decreasing to **41.0%** | Metric | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | % Change | | :----- | :----------------------------------------- | :----------------------------------------- | :------- | | Net revenues | $9,979 | $10,401 | (4.1)% | | Reported OCI | $5,399 | $5,246 | 2.9% | | Adjusted OCI | $5,465 | $5,278 | 3.5% | | Cigarettes Shipment Volume (sticks in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | % Change | | :-------------------------------------------- | :----------------------------- | :----------------------------- | :----- | :------- | | Marlboro | 27,436 | 31,289 | (3,853) | (12.3)% | | Total cigarettes | 30,270 | 34,348 | (4,078) | (11.9)% | | Cigarettes Retail Share | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Percentage Point Change | | :---------------------- | :----------------------------- | :----------------------------- | :---------------------- | | Marlboro | 41.0% | 42.0% | (1.0) | | Total cigarettes | 45.1% | 46.3% | (1.2) | - Reported domestic cigarette shipment volume decreased **11.9%** for the six months ended June 30, 2025, primarily due to industry decline, growth of flavored disposable e-vapor products, and discretionary income pressures[309](index=309&type=chunk) [Oral Tobacco Products Segment](index=60&type=section&id=Oral%20Tobacco%20Products%20Segment) For the six months ended June 30, 2025, oral tobacco products net revenues increased by **3.3%** to **$1,407 million** despite a **2.9%** volume decrease, with reported OCI significantly up **75.0%** to **$931 million** due to the absence of the 2024 Skoal impairment, and the U.S. nicotine pouch category growing to **50.6%** share | Metric | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | % Change | | :----- | :----------------------------------------- | :----------------------------------------- | :------- | | Net revenues | $1,407 | $1,362 | 3.3% | | Reported OCI | $931 | $532 | 75.0% | | Adjusted OCI | $935 | $886 | 5.5% | | Oral Tobacco Shipment Volume (cans in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | % Change | | :-------------------------------------------- | :----------------------------- | :----------------------------- | :----- | :------- | | Copenhagen | 185.6 | 203.0 | (17.4) | (8.6)% | | Skoal | 65.6 | 74.2 | (8.6) | (11.6)% | | on! | 91.4 | 74.5 | 16.9 | 22.7% | | Total oral tobacco products | 374.0 | 385.3 | (11.3) | (2.9)% | | Oral Tobacco Retail Share | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Percentage Point Change | | :------------------------ | :----------------------------- | :----------------------------- | :---------------------- | | Copenhagen | 16.4% | 19.8% | (3.4) | | Skoal | 6.3% | 7.8% | (1.5) | | on! | 8.7% | 7.5% | 1.2 | | Total oral tobacco products | 33.9% | 37.7% | (3.8) | - The U.S. nicotine pouch category grew to **50.6%** of the U.S. oral tobacco category, an increase of **9.4 share points** year-over-year for the six months ended June 30, 2025[328](index=328&type=chunk) [Liquidity and Capital Resources](index=62&type=section&id=Liquidity%20and%20Capital%20Resources) Altria relies on subsidiary cash flows, commercial paper, and a **$3.0 billion** revolving credit agreement for liquidity, with net cash from operating activities increasing to **$2,925 million** and a debt-to-Consolidated EBITDA ratio of **2.0** at June 30, 2025 - Altria's liquidity sources include subsidiary cash flows, commercial paper, a **$3.0 billion** revolving credit agreement, and access to credit markets[333](index=333&type=chunk) - Net cash provided by operating activities increased to **$2,925 million** for the first six months of 2025, up from **$2,802 million** in 2024, primarily due to lower payments for State Settlement Agreements, litigation, excise taxes, and income taxes[349](index=349&type=chunk) | Metric | For the Twelve Months Ended June 30, 2025 (in millions) | | :----- | :---------------------------------------------------- | | Debt | $24,720 | | Consolidated EBITDA | $12,538 | | Debt / Consolidated net earnings | 2.8 | | Debt / Consolidated EBITDA | 2.0 | - Estimated annual charges to cost of sales for State Settlement Agreements and FDA user fees are **$3.0 billion** on average for the next three years[343](index=343&type=chunk) [New Accounting Guidance Not Yet Adopted](index=64&type=section&id=New%20Accounting%20Guidance%20Not%20Yet%20Adopted) This section refers to Note 15 for details on new accounting guidance not yet adopted - The company refers to Note 15 for a discussion of issued accounting guidance applicable to, but not yet adopted by, Altria[353](index=353&type=chunk) [Contingencies](index=64&type=section&id=Contingencies) This section refers to Note 14 for a discussion of contingencies - The company refers to Note 14 for a discussion of contingencies, including legal proceedings[354](index=354&type=chunk) [Supplemental Guarantor Financial Information](index=65&type=section&id=Supplemental%20Guarantor%20Financial%20Information) PM USA, a wholly-owned subsidiary, fully and unconditionally guarantees Altria's outstanding debt securities and credit facilities, with this section providing summarized financial information for the Parent and Guarantor, including conditions for guarantee release - PM USA, a **100%** owned subsidiary, fully and unconditionally guarantees Altria's obligations under its outstanding debt securities, credit agreement, and commercial paper program[355](index=355&type=chunk) - The guarantees could be voided or subordinated if PM USA was insolvent or received less than reasonably equivalent value at the time of incurring the obligations[357](index=357&type=chunk) - PM USA will be released from its obligations upon payment in full of the guaranteed debt or if Altria's long-term senior unsecured debt rating by S&P reaches A or higher[362](index=362&type=chunk) | (in millions) | Parent (June 30, 2025) | Guarantor (June 30, 2025) | | :------------ | :--------------------- | :------------------------ | | Total current assets | $1,286 | $1,062 | | Total non-current assets | $14,525 | $1,242 | | Total current liabilities | $7,165 | $3,530 | | Total non-current liabilities | $25,220 | $516 | | Net earnings (losses) (Six Months Ended June 30, 2025) | $(274) | $3,825 | [Cautionary Factors That May Affect Future Results](index=66&type=section&id=Cautionary%20Factors%20That%20May%20Affect%20Future%20Results) This section highlights various forward-looking statements and important risk factors that could materially affect Altria's future results, including consumer preferences, competition, illicit e-vapor products, litigation, regulatory actions, tax increases, and supply chain disruptions - Key risks include inability to adapt to changing adult tobacco consumer preferences, intense competition, and the growth of illicit disposable e-vapor products[370](index=370&type=chunk) - Unfavorable litigation outcomes, governmental investigations, and significant federal, state, and local regulatory actions (including FDA actions and inactions) pose substantial risks[370](index=370&type=chunk) - Increases in tobacco product-related taxes and significant changes in price, availability, or quality of raw materials due to macroeconomic, climate, and geopolitical conditions are also critical risk factors[370](index=370&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=67&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Altria is exposed to interest rate risk from fixed-rate long-term debt, where a hypothetical **1%** increase in market interest rates would decrease fair value by **$1.8 billion** at June 30, 2025 | (in billions) | June 30, 2025 | December 31, 2024 | | :------------ | :------------ | :---------------- | | Fair value of long-term debt | $23.0 | $22.7 | | Decrease in fair value from a 1% increase in market interest rates | $1.8 | $1.7 | | Increase in fair value from a 1% decrease in market interest rates | $2.0 | $2.0 | - The company had no borrowings under its **$3.0 billion** Credit Agreement at June 30, 2025, with interest rates on potential borrowings based on Term Secured Overnight Financing Rate plus a percentage (**1.0%** at June 30, 2025)[372](index=372&type=chunk) [Item 4. Controls and Procedures](index=68&type=section&id=Item%204.%20Controls%20and%20Procedures) Altria's management, including the CEO and CFO, evaluated and concluded the effectiveness of disclosure controls and procedures as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025[373](index=373&type=chunk) - No material changes in internal control over financial reporting occurred during the most recent fiscal quarter[374](index=374&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=67&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 14 for a discussion of legal proceedings pending against Altria - The company refers to Note 14 for a comprehensive discussion of legal proceedings[375](index=375&type=chunk) [Item 1A. Risk Factors](index=68&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously disclosed in the 2024 Form 10-K and First Quarter Form 10-Q - No material changes to previously disclosed risk factors in the 2024 Form 10-K and First Quarter Form 10-Q[376](index=376&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=68&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Altria's Board authorized a new **$1.0 billion** share repurchase program in January 2025, with **$400 million** remaining as of June 30, 2025 - A new **$1.0 billion** share repurchase program was authorized in January 2025, with **$400 million** remaining as of June 30, 2025[378](index=378&type=chunk) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs | | :----- | :------------------------------- | :--------------------------- | :--------------------------------------------------------------------------------------- | | April 1-30, 2025 | 1,714,864 | $57.83 | $576,688,888 | | May 1-31, 2025 | 1,385,047 | $58.86 | $495,371,436 | | June 1-30, 2099 | 1,609,639 | $59.25 | $400,000,010 | [Item 5. Other Information](index=69&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025 - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted, modified, or terminated by directors or officers during Q2 2025[379](index=379&type=chunk) [Item 6. Exhibits](index=69&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including descriptions of registered securities, performance incentive plans, certifications from the CEO and CFO, litigation matters, and XBRL data files - The exhibits include descriptions of registered securities, stock compensation plans, CEO/CFO certifications (Sarbanes-Oxley Act), and details on certain litigation matters[381](index=381&type=chunk) Signature [Signature](index=71&type=section&id=Signature) The report was duly signed on behalf of Altria Group, Inc. by Salvatore Mancuso, Executive Vice President and Chief Financial Officer, on July 30, 2025 - The report was signed by Salvatore Mancuso, Executive Vice President and Chief Financial Officer, on July 30, 2025[385](index=385&type=chunk)
Altria(MO) - 2025 Q2 - Quarterly Results
2025-07-30 11:03
ALTRIA REPORTS 2025 SECOND-QUARTER AND FIRST-HALF RESULTS; NARROWS 2025 FULL-YEAR EARNINGS GUIDANCE RICHMOND, Va. - July 30, 2025 - Altria Group, Inc. (NYSE: MO) today reports our 2025 second-quarter and first-half business results and narrows our guidance for 2025 full-year adjusted diluted earnings per share (EPS). Exhibit 99.1 "In the second quarter, we continued the pursuit of our Vision while maintaining our strong and profitable core businesses," said Billy Gifford, Altria's Chief Executive Officer. " ...
How Will Altria Stock React To Its Upcoming Earnings?
Forbes· 2025-07-29 08:05
Core Insights - Altria is expected to announce earnings on July 30, 2025, with analysts projecting earnings of $1.38 per share and revenues of $5.19 billion, compared to $1.31 per share and $5.28 billion in the same quarter last year [3][4]. Group 1: Historical Performance - Over the past five years, Altria's stock has shown a positive one-day return in 53% of cases following earnings announcements, with a median one-day increase of 1.9% and a maximum increase of 7.8% [3][7]. - In the last three years, the percentage of positive one-day returns increased to 55%, with the median of positive returns at 1.9% and negative returns at -2.1% [7]. Group 2: Financial Metrics - Altria has a current market capitalization of $101 billion, generating $20 billion in revenue over the past twelve months, with $12 billion in operating profits and a net income of $10 billion, indicating strong operational profitability [4]. Group 3: Trading Strategies - Traders may consider pre-earnings positioning based on historical probabilities and evaluate immediate and mid-term stock reactions post-earnings to inform trading decisions [6]. - Correlation between short-term and medium-term returns can be analyzed to identify suitable trading strategies, particularly if the 1D and 5D returns show high correlation [8].
Altria's Q2 Earnings on the Deck: How to Play the Stock
ZACKS· 2025-07-28 18:11
Core Viewpoint - Altria Group, Inc. is expected to report a decline in revenues for Q2 2025, while earnings are projected to show growth compared to the previous year [1][9]. Revenue and Earnings Estimates - The Zacks Consensus Estimate for Q2 revenues is $5.2 billion, reflecting a 1.7% decrease from the same period last year [1]. - The consensus estimate for earnings per share (EPS) has increased to $1.37, indicating a 4.6% growth year-over-year [1][9]. Earnings Performance and Predictions - Altria has a trailing four-quarter average earnings surprise of 1.3%, with the last quarter's earnings exceeding the Zacks Consensus Estimate by 5.1% [2]. - The company currently has an Earnings ESP of +1.03% and a Zacks Rank of 3 (Hold), suggesting a potential earnings beat [4][3]. Factors Influencing Q2 Earnings - Regulatory pressures, particularly the ITC's exclusion order on NJOY ACE, have negatively impacted Altria's smoke-free product portfolio [5]. - The cigarette business is facing volume pressures due to consumer downtrading and competition from illicit flavored disposable vapes [5]. - Despite these challenges, Altria's strong pricing power and cost control measures are expected to support profitability [6][7]. Stock Performance - Over the past three months, Altria's stock has increased by 2.6%, slightly below the Zacks Tobacco industry's growth of 2.7% and significantly trailing the S&P 500's 15.5% rise [8]. - Altria's stock performance has outpaced Philip Morris International, which declined by 6.8%, but underperformed Turning Point Brands and British American Tobacco [8]. Valuation Analysis - Altria shares are trading at a forward 12-month price-to-earnings (P/E) ratio of 10.96, below the industry average of 14.48, indicating attractive value for investors [11]. - Compared to key competitors, Altria's P/E ratio is significantly lower than Philip Morris International (20.11) and Turning Point Brands (21.54), while being comparable to British American Tobacco (10.94) [13]. Investment Outlook - Altria faces a mixed backdrop with regulatory challenges and volume pressures, but resilient pricing power and disciplined cost control may provide stability [14]. - Investors may consider holding positions or selectively adding to their investments, while monitoring management's updates on product pipeline and strategic execution [14].