Altria Continues to Expect Adjusted Earnings Per Share Expansion

Image: Altria’s shares have recovered nicely since the beginning of 2024.

By Brian Nelson, CFA

On April 29, tobacco giant Altria (MO) reported mixed first quarter results with non-GAAP earnings per share exceeding the consensus forecast, but revenue coming in a bit light relative to the Street forecast. Net revenues fell 5.7% in the quarter due to weaker performance in its smokeable products segment. However, adjusted diluted earnings per share increased 6% from last year’s quarter, to $1.23. The bottom line was bolstered by fewer shares outstanding, higher adjusted operating companies income (OCI), and a lower adjusted tax rate.

Management had the following to say about the quarter:

Our highly profitable traditional tobacco businesses performed well in a challenging environment in the first quarter. The smokeable products segment delivered solid adjusted operating companies income growth behind the strength of Marlboro. In the oral tobacco products segment, on! maintained momentum in a competitive marketplace as Helix invested strategically behind the brand. And shareholders continued to benefit from strong cash returns through dividends and share repurchases, while we invested in pursuit of our Vision.

In the first quarter, Altria bought back 5.7 million shares at an average price of $56.97, for a total cost of $326 million. The company still has $674 million remaining under its share repurchase program, which it expects to complete by the end of the year. Altria paid $1.7 billion in dividends in the quarter, and the firm maintained its current outlook. Management continues to expect to deliver a full-year 2025 adjusted diluted earnings per share growth rate of 2%-5% versus 2024. The growth rate represents adjusted diluted earnings per share in the range of $5.30-$5.45 from a base of $5.19 in 2014. We continue to like Altria as an idea in the High Yield Dividend Newsletter portfolio.

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