Altria (MO) Q2 EPS Jumps 8%

Core Insights - Altria Group reported Q2 2025 results with adjusted earnings and revenue exceeding analyst expectations, driven by price increases and growth in oral tobacco products [1][2] - Adjusted diluted EPS was $1.44, surpassing the estimate of $1.39, and revenue reached $6.10 billion, despite a 1.7% decline year-over-year [1][2] Financial Performance - Adjusted diluted EPS (Non-GAAP) was $1.44, up 8.3% year-over-year, compared to $1.33 in Q2 2024 [2] - Revenue (GAAP) was $6.10 billion, down 1.7% from $6.21 billion in Q2 2024, with smokeable products revenue at $5.36 billion, a 2.5% decline [2][5] - Oral tobacco products revenue increased by 5.9% to $753 million, driven by a 26.5% rise in on! nicotine pouch shipments [2][6] Business Overview and Strategy - Altria is a leading U.S. tobacco company known for Marlboro cigarettes and a range of smoke-free products, focusing on transitioning adult smokers to non-combustible products [3][4] - The company is investing in nicotine pouches and has made acquisitions like NJOY e-vapor to enhance its product offerings [4] Segment Performance - The smokeable products segment faced challenges, with a 10.2% drop in U.S. cigarette shipment volumes, leading to a 2.5% revenue decline [5] - Despite volume declines, the adjusted margin for smokeable products improved by 2.9 percentage points to 64.5% due to price increases and cost control [5] - Oral tobacco products showed growth, but total shipment volume declined by 1.0%, indicating challenges in traditional brands [6] Regulatory and Competitive Environment - The company is navigating a highly regulated environment and is focused on compliance and monitoring the impact of tariffs on its supply chain [8] - NJOY ACE, Altria's main e-vapor device, is currently off the U.S. market due to patent litigation, affecting its momentum in the e-vapor category [7] Capital Deployment and Shareholder Returns - In the first half of 2025, Altria returned $3.5 billion to shareholders through dividends and $600 million through share repurchases [9] - The company has $400 million remaining in its buyback authorization and maintains a focus on operational efficiency [9] Future Guidance - Altria raised its full-year 2025 adjusted diluted EPS guidance to a range of $5.35 to $5.45, projecting up to 5.0% growth [11] - The company continues its consistent dividend program and share repurchases, while monitoring developments in smoke-free product launches and regulatory outlooks [12]