Nicotine pouches have become a multibillion-dollar industry. Now Cannadips and other brands are putting their money where your mouth is. https://t.co/IwdLxZLV04 https://t.co/IwdLxZLV04 ...

The number of young kids becoming sick after getting their hands on nicotine products like pouches and vapes, it has skyrocketed in recent recent years. According to a new study, US poison centers reported more than 130,000 cases of nicotine poisonings in kids under the age of six between 2010 and 2023. Now, that same study published by the American Academy of Pediatrics, it found an increase in poisonings of 763% in just 3 years.NBC News medical analyst Dr. . Vin Gupta joins us now. Dr.. Gupta, it's great ...

Core Viewpoint - The resurgence of tobacco stocks, particularly Altria Group, has been notable in 2025, with shares up nearly 17% and approaching $60, a level not seen since 2017, as investors seek safe-haven stocks during uncertain times [1]. Company Overview - Altria Group, owner of the Marlboro brand, primarily operates in the U.S. market and has faced significant declines in cigarette usage, which is expected to continue, particularly among young adults [3][8]. - The company has invested in diversifying its product offerings, including cannabis, nicotine pouches, cigars, electronic vaping, and alcohol, but has experienced muted success and notable failures, such as the $12.8 billion investment in Juul, which was written down to zero [4][12]. Financial Performance - The majority of Altria's revenue, approximately 88%, still comes from smokables, with new initiatives in vaping and nicotine pouches contributing minimally to overall revenue [5]. - Cigarette volumes for Marlboro declined by 13.3% year-over-year, a significant acceleration compared to historical declines of under 5% annually, indicating a major shift in the industry [8][10]. Dividend and Profitability Risks - Altria's ability to maintain profits has relied on increasing cigarette prices and reducing overhead costs, but this strategy is not sustainable long-term as the majority of its $11.6 billion in annual operating earnings is derived from cigarettes [9][10]. - The company faces risks to its dividend growth, which could be halted or slashed if profits decline without being replaced by new nicotine consumption [9][10]. Debt and Financial Strategy - Altria has accumulated $26 billion in debt, primarily to fund stock repurchases, which has not yet led to a dividend cut but poses risks for the future as the cigarette business deteriorates [14]. - The company has reduced its shares outstanding by about 10% over the last five years, which can benefit dividend per share but is being achieved through increased leverage [13][14]. Investment Outlook - The combination of a highly leveraged balance sheet, significant volume declines, and lack of successful diversification presents a challenging outlook for Altria Group, suggesting that investors should be cautious about purchasing the stock even with its attractive dividend yield [15][16].

Core Viewpoint - Altria Group, the largest cigarette maker in North America, is facing significant challenges due to declining cigarette volumes, despite rising earnings and dividends, raising concerns for investors [1][9]. Company Overview - Altria primarily focuses on cigarette production, with 14.2 billion cigarettes produced in Q1 2025, accounting for approximately 97% of its smokable products [3]. - Smokable products contribute around 88% to Altria's revenue, highlighting the importance of cigarettes to its business model [3]. Industry Trends - Cigarette volumes are declining, with a 13.7% decrease in production from nearly 16.5 billion in Q1 2024 to 14.2 billion in Q1 2025 [4]. - Historical data shows a significant drop from over 25 billion cigarettes produced in Q1 2020, indicating ongoing industry headwinds [4]. Company Strategies - Altria has attempted to mitigate the impact of declining cigarette demand through price increases, leveraging the addictive nature of nicotine to maintain some pricing power [5]. - However, recent trends suggest that price increases alone are insufficient to sustain revenue growth [6]. Financial Performance - Despite a year-over-year revenue decline of 5.7% in Q1 2025, generating approximately $5.3 billion compared to nearly $6.4 billion in 2020, Altria has managed to keep earnings and dividends rising [9]. - The company has reduced its share count from 1.758 billion in Q1 2024 to 1.69 billion in Q1 2025, primarily through stock buybacks, which has helped support earnings [7][10]. Future Outlook - While Altria currently offers a 6.7% dividend yield, the company must find alternatives to cigarettes to avoid a potential terminal decline [11].

Financial Data and Key Metrics Changes - Net revenue for Q1 2025 was $6 million, a 50% increase sequentially from $4 million in Q4 2024 [28] - Gross margin showed a loss of $600,000, which is an improvement of 50% from the prior quarter [28] - Net loss from continuing operations improved to $3.3 million from $4.2 million in the preceding quarter [31] - Adjusted EBITDA loss improved to $2.3 million from $3.9 million in Q4 2024 [31] Business Line Data and Key Metrics Changes - Total cartons sold were 476,000, an increase of 41% compared to 338,000 in Q4 2024 [29] - The company is focusing on two main segments: reduced nicotine premium products and value-focused CMO brands [10][12] Market Data and Key Metrics Changes - The combustible cigarette market is valued at $85 billion, facing increasing price pressures and regulatory challenges [6] - The company aims to serve the Tier four market, which is approximately two-thirds the price of Tier one brands [10] Company Strategy and Development Direction - The company is transitioning into a growth model, focusing on expanding distribution and launching targeted marketing campaigns [12][20] - New product introductions include Smoker Friendly Black Label and VLN branded products, aimed at capturing market share in the natural cigarette and low nicotine segments [14][15] - The company is not waiting for FDA regulations to finalize its strategy and has developed technology for low nicotine tobacco products [22][23] Management's Comments on Operating Environment and Future Outlook - Management believes the current market dynamics present opportunities for high-quality branded products due to price pressures from big tobacco [21] - The company is on track to achieve breakeven EBITDA by Q4 2025, with expectations of revenue growth and margin improvement [25][35] Other Important Information - The company reduced its outstanding debt to $3.9 million, with debt-for-equity conversions of $3.1 million during the quarter [31] - A capital raise through warrant inducement raised approximately $5.4 million, providing cash runway for growth initiatives [32] Q&A Session Summary Question: Do you still foresee a breakeven of EBITDA for the fourth quarter of this year? - Yes, the company is on track to achieve breakeven in the latter half of the year [35] Question: Will CMO continue to grow from its first quarter level and will VLN kick in over the course of the year? - Yes, both Smoker Friendly and Pinnacle franchises are on a growth path, and state approvals for VLN will enhance distribution [36][37] Question: Does the increase in accounts receivable indicate a need for additional financial capital? - The company is comfortable with its cash runway after recent financing and the increase in receivables is due to new customer agreements [38][39] Question: What is the expected collection period for the accounts receivable balance? - The collection terms are typical for shipments, generally collected upon product delivery [40] Question: What has been the share issuance dilution from the warrants? - Current shares outstanding include approximately 7 million shares issued under the recent warrant inducement offering [42] Question: Are there any implications for twenty second Century Group from competitors' earnings results? - The company sees opportunities in the value segment due to price increases in the market and is anticipating the launch of partner VLNs [46][47] Question: Have we seen the worst of it in 2024, and are we now on a growth trajectory? - Yes, the company is now on a growth trajectory in terms of cartons, price, and revenue [48]