01—Abstract
Summary
Summary of the 10-Q filed April 28, 2016. Cited figures are marked; the original filing is the authoritative source.
Altria Group, Inc. (MO) reported strong financial results for the first quarter of 2016, with net earnings attributable to Altria Group, Inc. increasing by 19.5% to $1,217 milliona, and diluted EPS rising by 19.2% to $0.62 compared to the same period in 2015.
This growth was driven by higher pricing across its segments, particularly in smokeable and smokeless products, and a favorable decrease in certain expenses such as marketing, administration, and research costs. The company also benefited from lower interest and other debt expenses. The company's operational performance was robust, with net revenues increasing by 4.5% to $6,066 millionb, primarily due to strong performance in the smokeable products segment.
Despite a slight decline in cigarette industry volume, Altria saw a 1.2%c increase in its reported cigarette shipment volume, with Marlboro maintaining its leading retail share. The smokeless products segment also showed significant growth in both shipments and retail share, bolstered by the national expansion of Copenhagen Mint. The company reaffirmed its full-year 2016 adjusted diluted EPS growth forecast of 7% to 9%, demonstrating continued confidence in its business operations and strategic initiatives.
02—Key points
Key Highlights
- Net earnings attributable to Altria Group, Inc. increased by 19.5% to $1,217 million for the first quarter of 2016.
- Diluted EPS increased by 19.2% to $0.62 compared to the prior year's first quarter.
- Total net revenues grew by 4.5% to $6,066 million, driven by higher pricing and shipment volumes.
- The smokeable products segment saw a 3.8% increase in net revenues, with total cigarette shipment volume up 1.2%.
- The smokeless products segment reported an 11.4% increase in net revenues, with shipment volume growing by 7.8%.
- Altria reaffirmed its full-year 2016 adjusted diluted EPS growth guidance of 7% to 9%.
- The company's investment in SABMiller showed an increase in value, with potential for a significant one-time gain upon completion of the AB InBev acquisition.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2016, Altria Group, Inc. kept $0.20.
- Revenue$6.07B100.0%
- Cost of revenue−$3.41B56.2%
- Gross profit$2.66B43.8%
- Operating costs−$679.0M11.2%
- Operating income$1.98B32.6%
- Interest, other & tax−$760.0M12.5%
- Net income$1.22B20.1%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2016filed April 28, 2016Financial Statements
Q1 FY2016 against Q1 FY2015
| Line item | Q1 FY2016Q1 FY2015 | Change |
|---|---|---|
| Revenue | $6.07B$5.80B | +4.5% |
| Cost of Revenue | $1.87B$1.80B | +4.3% |
| Gross Profit | $2.66B$2.48B | +7.3% |
| Operating Income | $1.98B$1.86B | +6.0% |
| Net Income | $1.22B$1.02B | +19.5% |
| EPS (Basic) | $0.62$0.52 | +19.2% |
| Shares Outstanding (Basic) | 1.96B1.97B | −0.5% |
05—Questions
Frequently Asked Questions
What was Altria's financial performance for the first quarter of 2016?
Altria reported a significant increase in net earnings attributable to Altria Group, Inc., up 19.5% to $1,217 million, and diluted EPS rose 19.2% to $0.62 compared to the first quarter of 2015. Net revenues increased by 4.5% to $6,066 million, driven by strong performance in both the smokeable and smokeless products segments.
How did Altria's key segments perform in Q1 2016?
The smokeable products segment saw net revenues increase by 3.8% due to higher pricing and a 1.2% rise in cigarette shipment volume. The smokeless products segment experienced an 11.4% increase in net revenues, supported by higher shipment volumes and pricing, with Copenhagen and Skoal showing strong retail share growth.
What is Altria's outlook for the full year 2016?
Altria reaffirmed its full-year 2016 adjusted diluted EPS growth forecast to be in the range of 7% to 9% over 2015's adjusted diluted EPS. The company expects its effective tax rate on operations to be approximately 35.3%.
What are the significant factors influencing Altria's results?
Key factors influencing results include pricing strategies, shipment volumes, marketing and administrative cost management, and the impact of special items like asset impairment and exit costs, litigation charges, and gains on derivative financial instruments. The company's investment in SABMiller and the potential business combination with AB InBev also play a role.
06—Continue