Altria's Q3 Earnings Beat Estimates, Revenues Decline Y/Y

Core Insights - Altria Group Inc. reported third-quarter 2025 results with a revenue miss but an earnings beat, showcasing resilience in its core tobacco business and progress in smoke-free products [1][10] Financial Performance - Adjusted earnings per share (EPS) for the third quarter were $1.45, a 3.6% increase year over year, surpassing the Zacks Consensus Estimate of $1.44 [2] - Net revenues totaled $6,072 million, reflecting a 3% decline year over year, primarily due to decreased revenues in smokeable and oral tobacco products [3] - Revenues net of excise taxes decreased by 1.7% to $5,251 million, missing the consensus estimate of $5,321 million [3] Segment Performance - Smokeable Products: Net revenues fell 2.8% year over year to $5,387 million, driven by reduced shipment volume and increased promotional investments, partially offset by higher pricing [4] - Domestic cigarette shipment volumes dropped 8.2%, influenced by industry decline and retail share losses, although cigar shipment volumes increased by 2% [5] - Adjusted operating companies' income (OCI) in this segment rose 0.7% to $2,956 million, with adjusted OCI margins growing 1.3 percentage points to 64.4% [6] - Oral Tobacco Products: Net revenues decreased 4.6% to $689 million, attributed to reduced shipment volume and a change in shipment mix, despite increased pricing [7] - Domestic shipment volumes fell 9.6%, with adjusted OCI decreasing 0.9%, although adjusted OCI margins improved by 2.4 percentage points to 69.2% [8] Shareholder Returns and Guidance - The company ended the quarter with cash and cash equivalents of $3,472 million and long-term debt of $24,132 million [9] - Altria repurchased 1.9 million shares for $112 million in Q3 2025, raising its buyback plan to $2 billion and narrowing 2025 EPS growth guidance to 3.5-5% [10][11] - The adjusted EPS for 2025 is now expected to be in the range of $5.37 to $5.45, indicating a year-over-year growth of 3.5% to 5% [12] Strategic Outlook - The company is factoring in the impact of increased tariffs and minimal disruption from enforcement actions targeting the illicit e-vapor market into its 2025 guidance [13] - Altria continues to assess economic factors such as inflation, purchasing patterns, and regulatory developments while investing in smoke-free product research and development [14] - The expected adjusted effective tax rate for 2025 is 23-24%, with capital expenditures projected between $175-$225 million [15]