Altria(MO) - 2025 Q2 - Quarterly Results

Financial Performance - Altria reported Q2 2025 net revenues of $6.1 billion, a decrease of 1.7% compared to Q2 2024, and first-half revenues of $11.4 billion, down 3.6% year-over-year[3]. - The reported diluted EPS for Q2 2025 was $1.41, a decrease of 36.2% compared to Q2 2024, primarily due to the prior year's gain on the sale of IQOS commercialization rights[3][18]. - Net revenues for the second quarter of 2025 decreased by 2.5% to $5,357 million, with revenues net of excise taxes decreasing by 0.4% to $4,570 million[31]. - Net revenues for the six months ended June 30, 2025, were $11,361 million, a decrease of 3.6% compared to $11,785 million in 2024[68]. - The company reported a significant decline in earnings before income taxes, down 39.1% to $3,118 million from $5,116 million in the prior year[64]. - Net earnings decreased by 37.5% to $2,378 million, down from $3,803 million in 2024[64]. - 2025 reported net earnings were $3,455 million, a decrease of 41.8% from 2024's $5,932 million, with diluted EPS dropping from $3.41 to $2.04[79]. - The company experienced a 37.5% decline in reported net earnings from 2024 to 2025, highlighting a challenging operational environment[81]. Earnings and Shareholder Returns - Adjusted diluted EPS for Q2 2025 increased by 8.3% to $1.44, while first-half adjusted diluted EPS rose 7.2% to $2.67[3][18]. - The company narrowed its 2025 full-year adjusted diluted EPS guidance to a range of $5.35 to $5.45, reflecting a growth rate of 3.0% to 5.0% from a base of $5.19 in 2024[2][6]. - Altria returned over $4 billion to shareholders in the first half of 2025 through dividends and share repurchases, including $1.7 billion in dividends in Q2[2][5]. - The company repurchased 4.7 million shares at an average price of $58.63 in Q2 2025, totaling $274 million, and 10.4 million shares for $600 million in the first half[12]. Operational Metrics - Domestic cigarette shipment volume decreased by 10.2% in the second quarter, with total cigarette shipment volume down 10.2% to 16,066 million sticks[32][34]. - Marlboro's retail share of the total cigarette category was 41.0%, a decrease of 0.9 percentage points compared to the prior year[37]. - Net revenues for oral tobacco products increased by 5.9% to $753 million in the second quarter, with revenues net of excise taxes increasing by 6.0% to $728 million[41]. - Domestic shipment volume for oral tobacco products decreased by 1.0%, with total oral tobacco products shipment volume down 1.0% to 198.6 million cans[43][47]. - The total estimated domestic cigarette industry volume decreased by an estimated 8.5% when adjusted for trade inventory movements[36]. - The total oral industry volume increased by an estimated 11% for the six months ended June 30, 2025, driven by growth in oral nicotine pouches[46]. Cost and Expenses - The company incurred asset impairment and exit costs of $873 million in 2025, compared to $354 million in 2024[68]. - Interest and other debt expense for the six months ended June 30, 2025, was $537 million, compared to $515 million in 2024[68]. - The total excise taxes on products sold for the six months ended June 30, 2025, were $1,552 million, down from $1,791 million in 2024[73]. Asset and Liability Management - Total assets decreased from $35,177 million at the end of 2024 to $32,332 million by June 30, 2025, indicating a reduction in asset base[85]. - Total liabilities decreased from $37,365 million to $35,538 million during the same period, suggesting improved financial leverage[85]. - The total debt remained relatively stable, with a slight decrease from $24,926 million to $24,720 million, indicating effective debt management[85]. Strategic Focus - The company is focused on transitioning adult smokers to a smoke-free future and exploring new growth opportunities beyond nicotine[51]. - The company plans to invest in marketplace activities and continued research for smoke-free products as part of its long-term vision[9]. - Altria's guidance considers the impact of increased tariffs and assumes limited effects on product volumes from enforcement against illicit products[7][8].