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10-QPeriod: Q3 FY2019

ALTRIA GROUP, INC. Quarterly Report for Q3 Ended Sep 30, 2019

Filed October 31, 2019For Securities:MO

Summary

Altria Group, Inc. reported a net loss attributable to Altria of $2,600 million ($1.39 per diluted share) for the third quarter of 2019, a significant decrease compared to a net income of $1,943 million ($1.03 per diluted share) in the same period of 2018. This decline was primarily driven by a substantial non-cash pre-tax impairment charge of $4.5 billion ($2.41 per diluted share) related to Altria's investment in JUUL, along with increased interest expenses from recent debt financing and losses on Cronos-related financial instruments. Despite the reported net loss for the quarter, Altria's core smokeable products segment demonstrated resilience, with operating companies income increasing by 12.5% to $2,561 million, driven by higher pricing and lower promotional spending, which more than offset a slight decline in shipment volumes. The smokeless products segment also showed growth in operating companies income, up 12.7% to $417 million, benefiting from price increases. However, the wine segment experienced a decline in both net revenues and operating companies income. Altria reaffirmed its full-year 2019 adjusted diluted EPS growth forecast of 5% to 7%, excluding special items.

Financial Highlights

49 data points
Beta

Revenue

$6.86B

0.5% Gross Margin

Net Income

-$2.60B

-0.4% Net Margin

EPS (Diluted)

$-1.39

Total Assets

$52.91B

Cash & Equivalents

$1.60B

Free Cash Flow

$2.80B

Financial Statements
Beta
Revenue$6.86B
Cost of Revenue$1.92B
Gross Profit$3.50B
Operating Income$2.94B
Net Income-$2.60B
EPS (Basic)$-1.39
EPS (Diluted)$-1.39
Shares Outstanding (Basic)1.87B
Shares Outstanding (Diluted)1.87B

Key Highlights

  • 1Significant Q3 2019 net loss of $2.6 billion due to a $4.5 billion impairment charge on the JUUL investment.
  • 2Core smokeable products segment operating income increased by 12.5% to $2.56 billion, driven by higher pricing.
  • 3Smokeless products segment operating income grew by 12.7% to $417 million, also supported by pricing.
  • 4Altria reaffirmed its full-year 2019 adjusted diluted EPS growth forecast of 5% to 7%.
  • 5Total debt increased to $27.9 billion, primarily due to new long-term debt issuances to fund investments in JUUL and Cronos.
  • 6Quarterly dividend increased by 5% to $0.84 per share, with an annualized rate of $3.36 per share.
  • 7The company continues to face regulatory scrutiny and litigation risks inherent in the tobacco industry.

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