Altria(US:MO) Tianfeng Securities·2025-05-11 14:16Investment Rating - Industry rating is maintained at "Outperform" [10] Core Insights - Japan Tobacco's revenue for Q1 2025 reached 827 billion JPY, a year-on-year increase of 11.7%, driven by its core tobacco business [3] - The reduced-risk products segment saw revenue of 26.6 billion JPY, up 11.3% year-on-year, with sales volume increasing by 19.0% [4] - Altria's net revenue for Q1 2025 was 5.259 billion USD, a decrease of 5.7% compared to Q1 2024, while NJOY's market share in the U.S. increased to 6.6% [6] Summary by Sections Japan Tobacco Performance - The company reported an operating profit of 248.8 billion JPY, a 15.3% increase year-on-year, with net profit slightly up by 0.1% to 157.5 billion JPY [3] - Free cash flow fell to -132.2 billion JPY, indicating challenges in cash generation despite revenue growth [3] Reduced-Risk Products - The reduced-risk products segment's sales volume reached 3 billion units, a 19.0% increase, with the HTS category growing by 27.7% [4] - In Japan, the reduced-risk products market accounted for approximately 46.1% of the total tobacco market, with the company's market share rising to 14.8% [4] Altria's Performance - Altria's diluted EPS for Q1 2025 was 1.23 USD, reflecting a 6.0% year-on-year increase despite a decline in overall net revenue [6][8] - The company recorded a non-cash impairment charge of 873 million USD due to the ITC's import ban on NJOY ACE products [7] Strategic Decisions - Japan Tobacco announced a significant strategic decision to divest its pharmaceutical business, focusing on tobacco and processed food sectors [5] - Altria plans to repurchase 1 billion USD worth of shares in 2025, having already repurchased 5.7 million shares in Q1 at an average price of 56.97 USD [8]