By Brian Nelson, CFA
Altria (MO) recently reported mixed third quarter results with revenue missing the consensus mark, but non-GAAP earnings per share coming in line. Net revenues dropped 3% in the quarter year-over-year due to lower net revenues in the smokeable and oral tobacco products segments, while adjusted diluted earnings per share increased 3.6%, to $1.45. Adjusted operating companies income (OCI) totaled $2.96 billion in the period, up from $2.94 billion in last year’s quarter. The company narrowed its guidance for 2025 full-year adjusted diluted earnings per share, while it expanded its existing share repurchase program. Management expects fourth quarter earnings per share growth to moderate as it laps a lower share count associated with the completion of its accelerated share repurchase program in 2024.
The executive team had the following to say about the results:
Altria continued to build significant momentum in the third quarter with exciting progress across our businesses. Our core tobacco businesses remained resilient; we advanced our smoke-free portfolio; and we opened new pathways for long-term adjacent growth in international modern oral and U.S. non-nicotine innovation.
We also continue to demonstrate our commitment to returning value to our shareholders. In August, we announced our 60th dividend increase in 56 years, and yesterday, our Board authorized an expansion of our share repurchase program.
We are raising the lower-end of our 2025 full-year guidance and now expect to deliver adjusted diluted EPS in a range of $5.37 to $5.45. This range represents a growth rate of 3.5% to 5.0% from a base of $5.19 in 2024.
In the third quarter, Altria repurchased 1.9 million shares for a total cost of $112 million. Through the first nine months of the year, Altria bought back 12.3 million shares for a total cost of $712 million. The board also expanded its existing share repurchase program to $2 billion from $1 billion with expiration date of December 31, 2026. For the third quarter and first nine months of 2025, Altria paid $1.7 billion and $5.2 billion in dividends, respectively. The company’s latest dividend increase in August of 3.9% was the 60th increase in the past 56 years. Altria’s current annualized dividend rate is $4.24 per share, with a forward estimated yield of 7.3%. Though the decline in total cigarette volumes is a headwind, we continue to like shares in the High Yield Dividend Newsletter portfolio.
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Brian Nelson owns shares in SPY, SCHG, QQQ, QQQM, DIA, VOT, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, QQQM, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE, DIA, RSP, SCHG, QQQ, QQQM, and VOO. Some of the other securities written about in this article may be included in Valuentum’s simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.
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