Summary
Altria Group, Inc. reported a strong first quarter of 2018, with net earnings attributable to Altria Group, Inc. increasing by 35.2% to $1.9 billion, and diluted EPS rising 38.9% to $1.00 per share. This growth was primarily driven by a lower effective tax rate due to the Tax Cuts and Jobs Act, improved earnings from its investment in AB InBev, and stronger performance in the smokeless products segment. The company also demonstrated a commitment to shareholder returns by approving a 6.1% increase in its quarterly dividend to $0.70 per share and continuing its share repurchase program, having completed one $1 billion program and initiating another. Despite a slight decline in smokeable product volumes, Altria managed to offset this with pricing strategies and favorable NPM (Non-Participating Manufacturer) adjustment items, while the smokeless products segment showed robust growth. Overall, the results reflect a solid operational performance coupled with the significant benefit of tax reform, positioning the company favorably for the remainder of the year. Investors can look forward to continued dividend growth and capital returns, though the long-term challenges within the tobacco industry, including regulatory scrutiny and evolving consumer preferences, remain key considerations.
Financial Highlights
47 data points| Revenue | $6.11B |
| Cost of Revenue | $1.73B |
| Gross Profit | $2.94B |
| Operating Income | $2.32B |
| Net Income | $1.89B |
| EPS (Basic) | $1.00 |
| EPS (Diluted) | $1.00 |
| Shares Outstanding (Basic) | 1.90B |
Key Highlights
- 1Net earnings attributable to Altria Group, Inc. increased by 35.2% to $1.9 billion in Q1 2018 compared to Q1 2017.
- 2Diluted EPS increased by 38.9% to $1.00 per share, largely driven by tax reform and improved AB InBev investment earnings.
- 3The company's effective tax rate decreased significantly to 23.2% from 33.0% due to the Tax Cuts and Jobs Act.
- 4Altria increased its quarterly dividend by 6.1% to $0.70 per share, with an annualized rate of $2.80 per share.
- 5Smokeable products segment operating income remained stable, with pricing increases offsetting lower shipment volumes and higher costs.
- 6Smokeless products segment showed strong growth, with net revenues up 12.7% and operating companies income up 37.4%, benefiting from pricing and the prior year's product recall impact.
- 7Altria reaffirmed its full-year 2018 adjusted diluted EPS growth forecast of 15% to 19%.