Summary
Altria Group, Inc. reported a strong first quarter of 2020, with net earnings attributable to Altria increasing by 38.6% to $1.55 billion, and diluted EPS rising 38.3% to $0.83, compared to the same period in 2019. This growth was driven by higher revenues across its smokeable and oral tobacco product segments, improved pricing, and lower interest expenses. The company also benefited from a significant reduction in losses related to its Cronos investment and favorable movements in its Anheuser-Busch InBev (ABI) investment. However, the company's wine business, Ste. Michelle Wine Estates, recorded a substantial pre-tax charge of $392 million due to inventory write-offs and estimated losses on grape purchase commitments, exacerbated by economic uncertainty surrounding the COVID-19 pandemic. In response to the pandemic's broader economic implications, Altria drew down its entire $3.0 billion revolving credit facility as a precautionary measure and rescinded the remaining $500 million of its share repurchase program to bolster liquidity. Despite these challenges, Altria's core tobacco businesses demonstrated resilience, and the company withdrew its full-year 2020 adjusted diluted EPS guidance due to ongoing uncertainties.
Financial Highlights
49 data points| Revenue | $6.36B |
| Cost of Revenue | $2.17B |
| Gross Profit | $2.87B |
| Operating Income | $2.34B |
| Net Income | $1.55B |
| EPS (Basic) | $0.83 |
| EPS (Diluted) | $0.83 |
| Shares Outstanding (Basic) | 1.86B |
| Shares Outstanding (Diluted) | 1.86B |
Key Highlights
- 1Net earnings attributable to Altria increased by 38.6% to $1.55 billion, with diluted EPS up 38.3% to $0.83.
- 2Smokeable products segment saw a 13.6% increase in net revenues, driven by higher shipment volume and pricing.
- 3Oral tobacco products segment net revenues grew by 11.3%, also attributed to higher pricing and shipment volume.
- 4Ste. Michelle Wine Estates recorded a significant $392 million pre-tax charge due to inventory issues and grape purchase commitments, impacting the wine segment's profitability.
- 5Altria drew down its entire $3.0 billion revolving credit facility as a precautionary measure amid COVID-19 uncertainty.
- 6The company rescinded the remaining $500 million of its share repurchase program to preserve liquidity.
- 7Altria withdrew its full-year 2020 adjusted diluted EPS guidance due to COVID-19 related uncertainties.