Altria Faces Q2 Setbacks: EPS Miss, Cigarette Sales Plunge, But Smoke-Free Innovations Shine

Altria Group Inc MO shares are trading lower after the company reported a 3% year-on-year decline in second-quarter FY24 revenues net of excise taxes to $5.28 billion, missing the analyst consensus estimate of $5.39 billion.

The revenue decrease was primarily driven by lower net revenues in the smokeable products segment, partially offset by higher net revenues in the oral tobacco products segment.

Revenue for smokeable products decreased by 5.6%, and oral tobacco products grew by 4.6%.

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Smokeable products segment reported domestic cigarette shipment volume decrease of 13%, with Marlboro down 11.8%.

Gross profit fell 2.2% Y/Y to $3.675 billion. The operating income for the quarter decreased by 12.8% to $2.5 billion.

Adjusted EPS of $1.31 missed the analyst consensus of $1.34.

Altria paid dividends of $1.7 billion and $3.4 billion in the second quarter and first half, respectively.

As of June-end, Altria had $990 million remaining under the currently authorized $3.4 billion share repurchase program, which it expects to complete by December-end.

Altria held $1.79 billion in cash and equivalents as of June-end. Total debt of Altria amounted to $25.02 billion.

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"In the second quarter, our companies' innovative smoke-free products delivered strong share and volume performance, and we hit meaningful milestones that we believe set us up for future success. NJOY received the first and only marketing granted orders from the FDA for menthol e-vapor products, and we submitted PMTA applications to the FDA for next generation NJOY and on! products," said CEO Billy Gifford.

Outlook: Altria narrowed FY24 adjusted EPS guidance from $5.05 – $5.17 to $5.07 – $5.15 versus an estimate of $5.10. 

This range represents an adjusted EPS growth rate of 2.5% to 4.0% from a base of $4.95 in 2023.

Price Action: MO shares are trading lower by 4.69% at $48.18 in premarket at the last check Wednesday.

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