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Altria Group, Inc. (MO) is a leading American corporation that operates through several wholly owned subsidiaries, including Philip Morris USA Inc., John Middleton Co., U.S. Smokeless Tobacco Company LLC, Helix Innovations LLC, and NJOY, LLC. The company is primarily involved in the manufacture and sale of tobacco products, offering a range of smokeable, oral tobacco, and e-vapor products . Altria's product lines include well-known brands such as Marlboro cigarettes, Copenhagen and Skoal moist smokeless tobacco, and NJOY e-vapor products .
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Smokeable Products - Includes combustible cigarettes and machine-made large cigars, with Marlboro as the principal brand. PM USA is the largest cigarette company in the United States, and Middleton produces cigars .
- Cigarettes - PM USA's primary product, with a shipment volume of 76.3 billion units in 2023 .
- Cigars - Produced by Middleton, with a shipment volume of approximately 1.8 billion units in 2023 .
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Oral Tobacco Products - Consists of moist smokeless tobacco (MST) and snus products, featuring premium brands like Copenhagen and Skoal, and the value brand Red Seal. Helix Innovations also produces on! oral nicotine pouches .
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E-Vapor Products - Sold by NJOY, LLC, including the NJOY ACE, the only pod-based e-vapor product with FDA market authorization. NJOY contracts with third-party importers for its products .
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All Other - Encompasses research and development for new product platforms and technologies, including NJOY, Horizon, and Helix International .
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Given the ongoing patent infringement lawsuit filed by JUUL against NJOY, which could potentially result in an exclusion order and halt imports of NJOY products by the end of December, can you provide more details on your contingency plans, specifically regarding the substantial equivalence applications and design changes to circumvent the patents, and how confident are you in receiving FDA approval in time?
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Regarding your "optimize and accelerate" initiative aiming to achieve at least $600 million in cumulative cost savings over the next five years through modernizing processes and leveraging artificial intelligence and automation, can you elaborate on the specific areas where these savings will come from, how these changes will impact your workforce, and what risks may affect your ability to achieve these savings?
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With the growth of illicit flavored disposable e-vapor products contributing to elevated cigarette industry volume declines and impacting your e-vapor category growth, what specific actions are you taking to address this issue, and how effective do you expect regulatory enforcement to be in curbing the proliferation of these products?
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In light of Japan Tobacco's recent acquisition in the U.S. cigarette market and considering your partnership with them on the Ploom device, how might this change in their market presence impact your joint venture and the competitive dynamics in the U.S., and are there plans to adjust your strategy accordingly?
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Given the elevated cigarette industry volume declines due to economic pressures on consumers, the growth of the discount segment by 1.5 share points, and Marlboro's retail share decline both year-over-year and sequentially, how do you plan to balance your pricing strategy with market share retention in the premium segment while addressing the shift toward discount products?
Recent developments and announcements about MO.
Financial Reporting
- Net Revenues: $5.974 billion (unchanged from Q4 2023).
- Revenues Net of Excise Taxes: $5.106 billion, up 1.6% from Q4 2023.
- Reported Diluted EPS: $1.79, a 54.3% increase from Q4 2023.
- Adjusted Diluted EPS: $1.29, a 9.3% increase from Q4 2023.
- Net Revenues: $24.018 billion, a 1.9% decrease from 2023.
- Revenues Net of Excise Taxes: $20.444 billion, a 0.3% decrease from 2023.
- Reported Diluted EPS: $6.54, a 43.1% increase from 2023.
- Adjusted Diluted EPS: $5.12, a 3.4% increase from 2023.
- Q4 Net Revenues: $5.263 billion, down 0.2% from Q4 2023.
- Full-Year Net Revenues: $21.204 billion, down 2.5% from 2023.
- Adjusted Operating Companies Income (OCI): Increased 2.0% for the full year, driven by higher pricing but offset by lower shipment volumes and higher promotional investments.
- Q4 Net Revenues: $692 million, up 2.7% from Q4 2023.
- Full-Year Net Revenues: $2.776 billion, up 4.1% from 2023.
- Adjusted OCI: Increased 5.2% for the full year, driven by higher pricing and lower SG&A costs.
- Q4 Shipment Volume: Consumables increased 15.3%, and devices increased 22.2% compared to Q4 2023.
- Full-Year Shipment Volume: Consumables reached 46.6 million units, and devices reached 5.0 million units.
- Adjusted Diluted EPS: Expected to range between $5.22 and $5.37, representing a growth rate of 2% to 5% from the 2024 base of $5.12.
- Capital Expenditures: Estimated between $175 million and $225 million.
- Depreciation and Amortization: Approximately $290 million.
- Announced a new $1 billion share repurchase program.
- ITC Ruling on NJOY: The U.S. International Trade Commission (ITC) issued an exclusion order and cease-and-desist orders against NJOY's ACE product due to patent infringement claims by JUUL Labs. The decision is under a 60-day review by the U.S. Trade Representative.
- Industry Challenges: Declines in cigarette shipment volumes were attributed to the growth of illicit e-vapor products and discretionary income pressures on adult tobacco consumers (ATCs).
Earnings Report
Altria Group, Inc. (MO) Earnings Results and Key Updates
On January 30, 2025, Altria Group, Inc. released its fourth-quarter and full-year 2024 financial results and provided guidance for 2025. Below are the highlights:
2024 Financial Performance
Fourth Quarter 2024
Full Year 2024
Segment Highlights
Smokeable Products
Oral Tobacco Products
NJOY Business
2025 Guidance
Shareholder Returns
Significant Trends and Updates
Key Takeaways
Altria demonstrated resilience in 2024 with strong EPS growth and strategic investments in its future, including the NJOY business. However, challenges such as declining cigarette volumes and regulatory pressures remain significant. The company’s 2025 guidance reflects moderate growth expectations, supported by share repurchases and operational efficiencies.
For further details, access the full press release on Altria’s website.
Corporate Leadership
Board Change
New Board Member Announcement: Altria Group, Inc. (NYSE: MO) has announced the election of Richard S. Stoddart to its Board of Directors. This change will take effect on February 3, 2025. Mr. Stoddart will also join the Audit, Innovation, and Nominating, Corporate Governance and Social Responsibility Committees.