Altria's Results Edge Past Expectations

Core Insights - Altria Group reported fourth-quarter results that slightly exceeded expectations, with growth in smoke-free product segments [2][5] Financial Performance - Adjusted EPS for Q4 2024 was $1.29, surpassing analysts' estimate of $1.28, and reflecting a 9.3% increase from Q4 2023's $1.18 [3] - Revenues for Q4 2024 reached $5.11 billion, exceeding the forecast of $5.05 billion by approximately 1%, but showing a year-over-year decrease of 1.9% to $5.974 billion [2][5] - The adjusted OCI margin improved to 61.2%, up 220 basis points from 59.0% in Q4 2023 [3] - The adjusted tax rate decreased to 24.1%, down 50 basis points from 24.6% in Q4 2023 [3] Business Overview - Altria is a major player in the tobacco industry, known for its Marlboro brand, and is shifting focus towards smoke-free alternatives like nicotine pouches and e-vapor products [4] - The company is adapting to changing consumer preferences and regulatory pressures while strengthening its position in emerging markets [4] Segment Performance - Sales of core smokeable products remained stable, with revenues dipping only 0.2%, managed through price increases [5] - Oral tobacco products saw a 2.7% rise in net revenues, driven by a 44.4% increase in shipment volumes for on! nicotine pouches [6] - The NJOY segment experienced a 15.3% increase in consumables' shipment volume, despite legal challenges [6] Strategic Initiatives - Management announced a new $1 billion share repurchase program, indicating confidence in cash flows, while maintaining regular dividends [6] - Altria is forecasting adjusted EPS growth of 2% to 5% for 2025, reflecting optimism amid regulatory and market challenges [7] Future Outlook - Investors should monitor Altria's regulatory dealings, particularly regarding safety evaluations for its NJOY product, as the company's long-term prospects depend on effective smoke-free strategy deployment and product diversification [8]