Altria Q3: Earnings Beat, NJOY Gains Ground, But Marlboro Loses Share In Shrinking Market

Altria Group MO shares are trading higher on Thursday.

The company reported third-quarter adjusted earnings per share of $1.38, beating the street view of $1.35. Quarterly sales of $5.334 billion (+1.3%) beat the analyst consensus estimate of $5.326 billion.

Smokeable products segment reported domestic cigarette shipment volume decreased 8.6%, primarily due to the industry’s decline rate and retail share losses, partially offset by trade inventory movements and calendar differences. Marlboro shipment volume fell 7.5% in the quarter.

Also, Marlboro retail share of the total cigarette category was 41.7%, down 0.6 share points versus the prior year and 0.3 share points sequentially.

NJOY reported a 15.6% increase in consumables shipment volume to 10.4 million units and a 100% rise in device shipments to 1.1 million units. Additionally, their retail share of consumables in the U.S. multi-outlet and convenience channel grew by 2.8 percentage points to 6.2%.

“The smokeable products segment delivered solid operating companies income growth behind the resilience of Marlboro, and in the oral tobacco products segment, our MST brands continued to drive profitability while on! maintained momentum in the marketplace,” said Billy Gifford, Altria’s Chief Executive Officer.

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Altria plans to establish an Accelerated Business Solutions organization within Altria Client Services. This organization will be responsible for driving efficiency.

“We expect the initial phases of the Initiative will deliver at least $600 million in cumulative cost savings over the next five years,” the company said.

The cumulative cost savings exclude the company’s estimated total pre-tax charges for initial phases of approximately $100 million to $125 million.

In the third quarter, the company repurchased a total of 13.5 million shares at an average price of $50.37, amounting to $680 million, while for the first nine months, the repurchases totaled 67.6 million shares at an average price of $45.68, totaling $3.1 billion.

“We maintain our progressive dividend goal that targets mid-single digits dividend per share growth annually through 2028,” the company said.

Outlook: The company reaffirms its guidance for 2024, projecting adjusted diluted EPS to range from $5.07 to $5.15 (estimate: $5.10). This reflects a growth rate of 2.5% to 4% compared to the 2023 base of $4.95, with anticipated growth weighted toward the second half of the year.

Price Action: MO shares are trading higher by 8.36% to $54.72 at last check Thursday.

Image by svklimkin from Pixabay

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