On April 25, 2024, Altria Group Inc (MO, Financial) disclosed its financial results for the first quarter of 2024, revealing a mixed performance with some financial metrics aligning with analyst expectations, while others showed slight declines. The detailed earnings can be explored in their recent 8-K filing.
Company Overview
Altria Group Inc encompasses a variety of tobacco and related businesses including Philip Morris USA, US Smokeless Tobacco, and John Middleton. Notably, it holds a significant stake in Anheuser-Busch InBev and a 42% interest in Cronos Group, a cannabis manufacturer. Altria's brand portfolio includes the leading cigarette brand Marlboro, which captured a 42% market share in the US in 2022.
Financial Highlights
For Q1 2024, Altria reported net revenues of $5.576 billion, a decrease of 2.5% year-over-year, and revenues net of excise taxes stood at $4.717 billion, down by 1.0%. This revenue performance slightly missed the analyst expectations of $4.712 billion. The reported diluted EPS was $1.21, reflecting a significant 21.0% increase, primarily due to lower litigation expenses and fewer shares outstanding. However, the adjusted diluted EPS, which excludes special items, matched analyst estimates at $1.15 but was down 2.5% from the previous year.
Operational and Segment Performance
Altria's smokeable products segment saw a revenue decline of 3.6%, with a reported and adjusted operating companies income (OCI) decrease of 2.6% and 2.5% respectively, driven by lower shipment volumes and increased promotional investments. Conversely, the oral tobacco products segment experienced a revenue increase of 3.7%, with a 4.6% rise in both reported and adjusted OCI, benefiting from higher pricing and reduced promotional investments.
Strategic Moves and Shareholder Returns
During the quarter, Altria made strategic adjustments including the partial sale of its investment in ABI, generating approximately $2.4 billion. This capital influx supported an expansion of Altria’s share repurchase program, with a significant portion of shares expected to be reacquired by the end of 2024. Altria also continued its commitment to shareholder returns, distributing $1.7 billion in dividends.
Market and Future Outlook
Despite the challenging market conditions marked by regulatory uncertainties and shifting consumer preferences, Altria reaffirmed its full-year adjusted EPS guidance of $5.05 to $5.17, indicating an anticipated growth of 2% to 4.5%. This guidance reflects the company's strategic initiatives and expected market dynamics for the remainder of the year.
Conclusion
Altria's first-quarter results reflect resilience in a volatile market, underscored by strategic management decisions that bolster its financial and operational stability. The alignment of its adjusted EPS with analyst forecasts and proactive shareholder value initiatives positions Altria to navigate ongoing industry challenges effectively. Investors and stakeholders will likely watch closely as the company continues to adapt and evolve in response to both market opportunities and regulatory landscapes.
Explore the complete 8-K earnings release (here) from Altria Group Inc for further details.
