8-K: Altria Group Reports First-Quarter 2025 Results, Reaffirms Full-Year Guidance

Altria Group, Inc. announces its first-quarter 2025 financial results and reaffirms its full-year adjusted diluted earnings per share (EPS) guidance.

Summary

• Altria Group reported a 5.7% decrease in net revenues to $5.3 billion for Q1 2025.
• Revenues net of excise taxes decreased by 4.2% to $4.5 billion.
• Reported diluted EPS decreased by 47.9% to $0.63, while adjusted diluted EPS increased by 6.0% to $1.23.
• The company reaffirms its full-year 2025 adjusted diluted EPS guidance of $5.30 to $5.45, representing a growth rate of 2% to 5% from a 2024 base of $5.19.
• A non-cash impairment charge of $873 million was recorded due to the ITC orders affecting NJOY ACE.
• Altria repurchased 5.7 million shares at an average price of $56.97, totaling $326 million in Q1 2025.
• As of March 31, 2025, $674 million remains under the $1 billion share repurchase program, expected to be completed by December 31, 2025.
• Dividends of $1.7 billion were paid in the first quarter.
• The company has changed its treatment of amortization of intangibles, now excluding it from adjusted results.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While there are revenue declines and impairment charges, the company reaffirms its full-year guidance and shows growth in adjusted EPS. The focus on smoke-free products and shareholder returns also contributes to the neutral sentiment.

Positives

• Altria reaffirms its full-year 2025 adjusted diluted EPS guidance of $5.30 to $5.45.
• Adjusted diluted EPS increased 6.0% to $1.23 in Q1 2025.
• The smokeable products segment delivered solid adjusted operating companies income growth behind the strength of Marlboro.
• NJOY consumables reported shipment volume increased 23.9% to 13.5 million units.
• Total U.S. oral tobacco category share for on! nicotine pouches was 8.8%, an increase of 1.8 share points versus the prior year.

Negatives

• Net revenues decreased 5.7% to $5.3 billion in Q1 2025.
• Reported diluted EPS decreased 47.9% to $0.63.
• A non-cash impairment charge of $873 million was recorded to the e-vapor reporting unit goodwill.
• NJOY devices reported shipment volume decreased 70% to 0.3 million units.
• Smokeable products segment reported domestic cigarette shipment volume decreased 13.7%.

Risks

• The external environment remains dynamic, with conditions related to the economy, adult tobacco consumer dynamics, illicit product enforcement, and regulatory, litigation, and legislative developments.
• The company faces risks related to changes in adult tobacco consumer preferences, competition, and the growth of the e-vapor category.
• There are risks associated with litigation proceedings, governmental investigations, and increases in tobacco product-related taxes.
• The company is exposed to risks related to climate change and other environmental sustainability matters.
• The company faces risks associated with its investment in Cronos, including legal, regulatory and reputational risks.

Future Outlook

Altria expects to deliver full-year 2025 adjusted diluted EPS in a range of $5.30 to $5.45, representing a growth rate of 2% to 5% from a base of $5.19 in 2024.

Management Comments

• Our highly profitable traditional tobacco businesses performed well in a challenging environment in the first quarter, said Billy Gifford, Altrias Chief Executive Officer.
• We continue to expect to deliver a full-year 2025 adjusted diluted EPS growth rate of 2% to 5% versus 2024.

Industry Context

The report acknowledges a challenging environment for traditional tobacco businesses, influenced by factors such as the growth of illicit e-vapor products and discretionary income pressures on adult tobacco consumers.

Comparison to Industry Standards

• The report does not provide specific comparisons to industry standards or competitors.
• However, it mentions the impact of illicit e-vapor products on the industry's decline rate, suggesting that Altria is facing similar challenges as other companies in the tobacco sector.
• The company's focus on transitioning adult smokers to smoke-free products aligns with broader industry trends towards harm reduction and alternative nicotine delivery systems.

Legal Proceedings

• The ITCs importation ban and cease-and-desist orders applicable to NJOY ACE went into effect on March 31, 2025.

Stakeholder Impact

• Shareholders benefit from strong cash returns through dividends and share repurchases.
• Adult tobacco consumers are offered potentially less harmful choices through the company's focus on smoke-free products.
• The company's Optimize & Accelerate initiative may impact employees through cost savings and restructuring.

Next Steps

• The company will continue to monitor conditions related to the economy, adult tobacco consumer dynamics, illicit product enforcement, and regulatory, litigation, and legislative developments.
• Altria expects to complete its $1 billion share repurchase program by December 31, 2025.
• The company plans to continue investing in marketplace activities in support of its smoke-free products and continued smoke-free product research, development and regulatory preparation expenses.

Key Dates

Keywords

Altria, earnings, EPS, tobacco, NJOY, Marlboro, dividends, share repurchase, smokeable products, oral tobacco, financial results, guidance