Altria(US:MO)2026-01-29 15:02Financial Data and Key Metrics Changes - In 2025, adjusted diluted earnings per share grew by 4.4% and the company returned $8 billion to shareholders through dividends and share repurchases combined [4] - The smokable product segment delivered over $11 billion in adjusted operating income (OCI) for the full year, expanding adjusted OCI margins by 1.8 percentage points to 63.4% [18] - For the fourth quarter, adjusted OCI declined by 2.4%, and adjusted OCI margins contracted by 0.8 percentage points to 60.4% [18] Business Line Data and Key Metrics Changes - Domestic cigarette volumes declined by 7.9% in the fourth quarter and 10% for the full year [18] - The oral tobacco product segment retail share was 29.6% for the fourth quarter and 31.9% for the full year [23] - Total segment reported shipment volume decreased 6.3% for the fourth quarter and 5.5% for the full year [22] Market Data and Key Metrics Changes - The estimated number of adult consumers in the e-vapor and oral tobacco categories grew to almost 30 million, reflecting the potential for tobacco harm reduction in the U.S. [7] - The e-vapor category grew approximately 15% in 2025, with illicit products representing approximately 70% of the category [8] - The nicotine pouch category drove overall oral tobacco volume growth, which increased an estimated 14% over the past six months [10] Company Strategy and Development Direction - The company is focused on advancing its smoke-free portfolio and building a portfolio of FDA-authorized smoke-free products for adult smokers [16] - Strategic collaborations, such as with KT&G, aim to enhance international modern oral and U.S. non-nicotine growth [5] - The company plans to maintain a measured approach to investments in e-vapor until the regulatory framework is functioning effectively [10] Management's Comments on Operating Environment and Future Outlook - Management noted that the growth in disposable vapers moderated in 2025 compared to the prior year, indicating a potential stabilization in the market [9] - The company expects to deliver 2026 full year adjusted diluted EPS in a range of $5.56-$5.72, reflecting a growth rate of 2.5%-5.5% from a $5.42 base in 2025 [16] - Management expressed confidence in the company's strategy and the opportunities ahead, emphasizing the importance of responsible participation in the e-vapor category [17] Other Important Information - The company recorded non-cash impairment charges of $1.3 billion related to e-vapor definite-lived intangible assets and goodwill [23] - The company paid $7 billion in dividends in 2025, marking its 60th increase in the last 56 years [25] - The total debt-to-EBITDA ratio as of December 31 was 2x, in line with the company's target [25] Q&A Session Summary Question: Can you provide any color on the scope of the import/export program? - Management indicated that the program involves both upfront investments and the opportunity for duty drawback, setting up manufacturing capabilities for international markets [32] Question: Is the elevated CapEx associated with the investments for import/export? - Management confirmed that the primary driver of the increase in CapEx is the investments for the import/export business, but they did not provide guidance for future CapEx [34] Question: How is the promotional strategy behind Basic affecting net price realization? - Management clarified that the strategy around Basic is independent of the duty drawback and is aimed at capturing consumers under economic pressure [41] Question: Are there any signs of increased smoking incidence among younger legal-aged nicotine users? - Management stated that there are no trends indicating increased incidence among younger cohorts, emphasizing the need for expedited authorization of smoke-free products [52] Question: What is the pricing strategy for on! PLUS? - Management believes that on! PLUS is a differentiated product that commands a premium in the marketplace, with various introductory price promotions planned [53]