Company Overview - Altria Group is adapting to changing industry dynamics, focusing on expanding beyond traditional cigarettes into the smokeless product category due to rising health consciousness and government regulations [12] - Revenues from the oral product category are steadily increasing, driven by the growing popularity of reduced-risk products [12] Zacks Rank and Style Scores - Altria has a Zacks Rank of 3 (Hold) and a VGM Score of A, indicating a solid position in the market [13] - The company has a Growth Style Score of B, forecasting a year-over-year earnings growth of 4.5% for the current fiscal year [13] - Four analysts have revised their earnings estimates upwards in the last 60 days for fiscal 2025, with the Zacks Consensus Estimate increasing by $0.03 to $5.35 per share [13] Investment Potential - Altria's average earnings surprise stands at 1.3%, suggesting a potential for positive performance [13] - With a solid Zacks Rank and top-tier Growth and VGM Style Scores, Altria is recommended as a potential pick for growth investors [14]

Core Viewpoint - Altria Group has maintained a strong dividend history, raising its dividend annually since 2009, with a current forward yield of 7%, but concerns exist regarding the sustainability of this dividend amid declining cigarette volumes and competition from alternative products [1][11]. Revenue and Volume Analysis - Cigarette smoking in the U.S. is declining due to health concerns and the rise of alternatives like vaping, with Altria's cigarette shipment volumes down 13.7% in Q1, including a 13.3% drop for Marlboro and a 24.9% plunge in discount brand shipments [2][3]. - Revenue from the smokeable segment fell 4.1% to $3.91 billion, although adjusted operating income rose 2.7% due to lower manufacturing costs [4]. - In the oral tobacco segment, shipment volumes decreased by 5% to 175.4 million cans, with overall revenue rising by 0.5% to $654 million, but adjusted operating income remained flat [5]. - Altria's Njoy vaping business saw consumable shipments increase by 23.9% to 13.5 million units, but device shipments fell 70% to 0.3 million units, indicating a mixed performance in the vaping segment [6]. Financial Health and Dividend Safety - Altria generated $2.72 billion in operating cash flow and $2.68 billion in free cash flow in the quarter, with a dividend payout of $1.73 billion, resulting in a coverage ratio of over 1.5 times based on free cash flow [9]. - The company ended the quarter with net debt of $21.3 billion and a leverage ratio of 1.7 times, indicating manageable debt levels [9]. Future Outlook - Altria maintained its full-year guidance for adjusted EPS between $5.30 and $5.45, reflecting growth of 2% to 5%, while acknowledging the impact of increased tariffs and cost inflation on consumer behavior [7]. - There are concerns that continued price increases may not be sustainable in the face of declining volumes, which could affect long-term profitability [10][12]. Market Position and Valuation - Altria's stock has performed well in a volatile market, but the overall cigarette business is declining, and its smoke-free products are not yet significant enough to offset this trend [11]. - The company trades at a forward P/E ratio of 11 based on 2025 analyst consensus, which is higher than British American Tobacco but lower than Philip Morris International, which is experiencing growth without facing similar volume declines [13].

Core Viewpoint - Altria Group Inc. reported mixed first-quarter 2025 results, with a decline in top-line revenue but an increase in bottom-line earnings, reaffirming its 2025 adjusted EPS guidance [1][2]. Financial Performance - Adjusted earnings per share (EPS) for the first quarter were $1.23, a 6% increase year over year, surpassing the Zacks Consensus Estimate of $1.17 [2]. - Net revenues totaled $5,259 million, down 5.7% year over year, missing the consensus estimate of $4,638.2 million [2]. - Revenues from smokeable products fell 5.8% to $4,622 million, primarily due to reduced shipment volume, although higher pricing provided some offset [4]. Segment Analysis - **Smokeable Products**: - Net revenues decreased 5.8% year over year to $4,622 million, with domestic cigarette shipment volumes down 13.7% [4][5]. - Adjusted operating income (OCI) increased 2.7% to $2,518 million, with adjusted OCI margins growing 4.2 percentage points to 64.4% [6]. - **Oral Tobacco Products**: - Net revenues rose 0.5% to $654 million, driven by higher pricing, despite a 5% decline in domestic shipment volumes [7][8]. - Adjusted OCI remained flat, with a slight decline in adjusted OCI margin by 0.3 percentage points to 69.2% [9]. Shareholder Returns and Guidance - The company repurchased 5.7 million shares for $326 million in the first quarter, with $674 million remaining under its $1 billion share repurchase program [11]. - Altria expects 2025 adjusted EPS in the range of $5.30 to $5.45, reflecting a year-over-year growth of 2% to 5% from a base of $5.19 in 2024 [12][13]. Market Context - Altria's stock has gained 12.6% over the past three months, compared to the industry's growth of 21.8% [15].

Group 1 - The article discusses Altria Group (NYSE: MO) stock, previously rated as a hold, focusing on its technical trading indicators [1] - Sensor Unlimited, an economist with a PhD, specializes in financial economics and has a decade of experience covering the mortgage market, commercial market, and banking industry [2] - The article emphasizes the importance of asset allocation and ETFs related to the overall market, bonds, banking, financial sectors, and housing markets [2] Group 2 - The analyst has a beneficial long position in Altria Group shares through stock ownership, options, or other derivatives [3] - The article expresses the author's own opinions without receiving compensation from any company mentioned [3] - Seeking Alpha clarifies that past performance does not guarantee future results and that no specific investment advice is provided [4]

Financial Data and Key Metrics Changes - The Smokable Products segment grew adjusted operating company's income (OCI) by 2.7%, with adjusted OCI margins increasing by 4.2 percentage points to 64.4% [16][18] - Total domestic cigarette volumes declined by 13.7%, with an adjusted decline of 12% when accounting for calendar differences and trade inventory movements [17] - The company paid approximately $1.7 billion in dividends and repurchased 5.7 million shares in the first quarter [23] Business Line Data and Key Metrics Changes - The Smokable Products segment reported a decline in domestic cigarette volumes, while the Oral Tobacco Products segment delivered over $400 million in total adjusted OCI, with adjusted OCI margins at 69.2% [20] - Oral nicotine pouches drove an estimated 10% increase in oral tobacco industry volume, with ON! growing its share to 8.8%, an increase of 1.8 share points year-over-year [8][9] - The Cigars segment saw a reported shipment volume decrease of 2.9%, while Middleton continued to outperform in the large mass cigar industry [20] Market Data and Key Metrics Changes - The e-vapor category included over 20 million vapers, with disposable vapers increasing by approximately 4 million to around 14 million [10] - Illicit e-vapor products now represent more than 60% of the category, significantly impacting legitimate market players [10][12] - The company recorded $146 million of adjusted equity earnings from ABI, down 11.5% year-over-year due to a lower ownership interest [22] Company Strategy and Development Direction - The company aims to refine and strengthen its e-vapor product portfolio, focusing on consumer preferences and regulatory compliance [14] - The strategy includes advocating for regulatory reforms to address the illicit e-vapor market and enhance enforcement against illegal products [10][11] - The company plans to maintain its investment in the ON! brand while exploring opportunities in synthetic nicotine products [14][62] Management's Comments on Operating Environment and Future Outlook - Management noted that consumers are under economic pressure due to inflation, which is affecting purchasing behavior and driving some to seek price relief [17][31] - The company expects full-year adjusted diluted EPS in the range of $5.3 to $5.45, reflecting a growth rate of 2% to 5% from a base of $5.19 in 2024 [24] - Management emphasized the importance of monitoring consumer behavior and the potential impact of tariffs on purchasing decisions [70][74] Other Important Information - The company recorded a noncash impairment charge of $873 million due to ITC orders affecting Enjoy [22] - The company has $674 million remaining under its current share repurchase program, expected to be completed by the end of the year [23] Q&A Session Summary Question: Current state of the consumer and inflationary pressures - Management acknowledged that consumers are under pressure from cumulative inflation, impacting their purchasing behavior and leading to increased interest in illicit products [30][31] Question: Confidence in pricing strategy for cigarettes - Management expressed confidence in the strength of the Marlboro brand and the ability to implement pricing strategies effectively using data analytics [32][34] Question: Approach to the discount segment with the Basic brand - Management clarified that the repositioning of Basic is not a strategy shift but a response to market conditions, maintaining a focus on premium products [36][38] Question: Growth trajectory of ON! and competition - Management remains optimistic about ON!'s growth despite competitive pressures and is excited about upcoming product authorizations [39][41] Question: Strategy for e-cigarettes and market exit - Management emphasized the importance of participating in the e-vapor market long-term and is focused on regulatory compliance and product development [42][44] Question: Impact of tariffs on imports and consumer sentiment - Management noted that while tariffs may impact costs, the primary concern remains the sustained economic pressure on consumers due to inflation [68][70] Question: FDA and regulatory environment for unauthorized vapes - Management highlighted the need for quicker product authorizations and enforcement against illicit products to meet consumer demand [78]

Oral Tobacco & on! - Oral tobacco industry volume grew by 1.5% [12] - on! shipment volume increased by 18.0% to 39.3 million cans in Q1 2025 [12] - on! share of the oral tobacco category reached 8.8% in Q1 2025, a 1.8 percentage point increase [15] - on! brand impressions grew approximately 5x, reaching ~200 million in Q1 2025 [19] E-Vapor - Disposable e-vapor products continue to drive category growth, with past 30-day usage increasing from ~18.0 million to ~20.5 million [22] - The company is advocating for regulatory reforms and engaging with Congress to address illicit e-vapor products [28] - NJOY U S International Trade Commission (ITC)'s exclusion order and cease-and-desist orders took effect on March 31 [31] Financial Performance - Smokeable Products Segment Adjusted OCI increased by 2.7% to $2518 million in Q1 2025 [37] - Smokeable Products Segment Adjusted OCI Margins increased by 4.2 percentage points to 64.4% in Q1 2025 [37] - The company paid $1.7 billion in dividends in the first quarter [67] - The company repurchased 5.7 million shares for $326 million [69]

Core Viewpoint - Pomerantz LLP is investigating potential securities fraud or unlawful business practices involving Altria Group, Inc. and its officers or directors, following a downgrade by Deutsche Bank due to regulatory uncertainties [1][3]. Group 1: Investigation and Legal Actions - Pomerantz LLP is conducting an investigation on behalf of Altria investors regarding possible securities fraud or other unlawful business practices [1]. - Investors are encouraged to contact Pomerantz LLP for more information about the investigation [1]. Group 2: Stock Performance and Analyst Ratings - On April 2, 2025, Deutsche Bank downgraded Altria from "Buy" to "Hold" due to regulatory uncertainties after a ruling by the U.S. International Trade Commission regarding Altria's NJOY ACE e-vapor products infringing on Juul Labs' patents [3]. - Following the downgrade, Altria's stock price decreased by $1.67, or 2.84%, closing at $57.12 per share on the same day [3].

Core Insights - Altria reported $4.52 billion in revenue for Q1 2025, a year-over-year decline of 4.2% and a surprise of -2.57% compared to the Zacks Consensus Estimate of $4.64 billion [1] - The EPS for the quarter was $1.23, which is an increase from $1.15 a year ago, resulting in an EPS surprise of +5.13% against the consensus estimate of $1.17 [1] Revenue Performance - Net revenue from All Other/Financial Services was -$17 million, significantly lower than the estimated $36 million, representing a -189.5% change year-over-year [4] - Revenues net of excise taxes for Oral tobacco products were $629 million, slightly below the average estimate of $633.90 million, showing a +0.5% change year-over-year [4] - Revenues net of excise taxes for Smokeable Products were $3.91 billion, compared to the estimated $3.97 billion, reflecting a -4.1% change year-over-year [4] Operating Income - Operating income for Oral tobacco products was $433 million, compared to the average estimate of $448.82 million [4] - Adjusted operating income for Smokeable Products was $2.52 billion, exceeding the average estimate of $2.48 billion [4] - Operating loss for All Other/Financial Services was -$1.01 billion, significantly worse than the estimated -$120 million [4] Stock Performance - Altria's shares have returned -3.1% over the past month, while the Zacks S&P 500 composite has changed by -0.8% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Altria (MO) came out with quarterly earnings of $1.23 per share, beating the Zacks Consensus Estimate of $1.17 per share. This compares to earnings of $1.15 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 5.13%. A quarter ago, it was expected that this owner of Philip Morris USA, the nation's largest cigarette maker would post earnings of $1.27 per share when it actually produced earnings of $1.29, delivering a surprise of 1.5 ...

Financial Data and Key Metrics Changes - The Smokable Products segment grew adjusted operating company's income (OCI) by 2.7%, with adjusted OCI margins increasing by 4.2 percentage points to 64.4% [16][18] - Total domestic cigarette volumes declined by 13.7%, with an adjusted decline of 12% when accounting for calendar differences and trade inventory movements [17][18] - The company paid approximately $1.7 billion in dividends and repurchased 5.7 million shares in the first quarter [23] Business Line Data and Key Metrics Changes - The Oral Tobacco Products segment delivered over $400 million in total adjusted OCI, with adjusted OCI margins at 69.2%, slightly down from the previous year [20] - The Oral Tobacco Products segment reported a shipment volume decrease of 5%, with ON! brand growing while MST volumes declined [20][21] - The e-vapor category saw an increase in illicit products, with over 60% of the market comprised of these products [10][42] Market Data and Key Metrics Changes - The e-vapor category included more than 20 million vapers, an increase of over 2.6 million from the previous year [10] - The nicotine pouch category's share increased to 17.9%, up by 0.5 share points year-over-year [9] - The discount cigarette segment grew by 1.8 share points, while Marlboro's retail share declined by one share point [18][19] Company Strategy and Development Direction - The company aims to refine and strengthen its e-vapor product portfolio, particularly following the exit of EnjoyAce from the market [14][42] - The focus remains on maximizing profitability in the combustibles segment while balancing investments in smoke-free categories [51] - The company is advocating for regulatory reforms to address the illicit e-vapor market and enhance enforcement against illicit actors [10][11] Management's Comments on Operating Environment and Future Outlook - Management noted that consumers are under economic pressure due to inflation, impacting purchasing behavior [17][30] - The company expects full-year adjusted diluted EPS in the range of $5.3 to $5.45, reflecting a growth rate of 2% to 5% from 2024 [24][25] - Management expressed confidence in the Marlboro brand's resilience despite economic challenges [19][51] Other Important Information - The company recorded a non-cash impairment charge of $873 million due to ITC orders affecting Enjoy [22] - The total debt to EBITDA ratio as of March 31 was 2.1 times, in line with the target of approximately two times [23] Q&A Session Summary Question: Current state of the consumer and inflationary pressure - Management acknowledged that consumers are under pressure from cumulative inflation, impacting their purchasing decisions [30][31] Question: Confidence in pricing strategy for cigarettes - Management highlighted the strength of the Marlboro brand and the use of data analytics to manage pricing effectively [32][34] Question: Approach to the discount segment with the Basic brand - Management clarified that the repositioning of Basic is not a strategy shift but a response to market dynamics [36][38] Question: Growth trajectory of ON! brand and competition - Management expressed confidence in ON!'s growth, despite competitive pressures, and highlighted upcoming product innovations [39][41] Question: Strategy for e-cigarettes and market exit - Management emphasized the importance of participating in the e-vapor category and plans to address regulatory challenges [42][44] Question: Impact of tariffs on imports and consumer sentiment - Management noted that while tariffs may impact costs, the overall effect on consumer sentiment is still being assessed [68][70] Question: Future of synthetic nicotine products - Management indicated that synthetic nicotine is now on their radar, and they are exploring opportunities in this area [61][62] Question: Drivers behind decreased settlement payments - Management explained that the decrease in settlement payments is due to the expiration of the legal fund [63] Question: Long-term planning amidst tariff uncertainty - Management stated that they are monitoring the situation closely and have a robust supply chain strategy to manage costs [74][75]