01—Abstract
Summary
Summary of the 10-Q filed October 28, 2021. Cited figures are marked; the original filing is the authoritative source.
Altria Group, Inc. reported a net loss of $2.72 billiona, or $(1.48) per diluted share, for the third quarter of 2021.
This significant loss was primarily driven by a substantial non-cash impairment charge of $6.2 billionb related to its equity investment in Anheuser-Busch InBev (ABI). Excluding this and other special items, adjusted diluted earnings per share were $1.22, up from $1.19 in the prior year's quarter, indicating operational resilience. The company's core smokeable products segment showed stable performance, with OCI increasing slightly year-over-year on a reported basis, supported by pricing actions offsetting lower shipment volumes.
The oral tobacco products segment experienced a decline in OCI, impacted by shifts in product mix and increased costs. Altria also announced a $1.5 billionc expansion of its share repurchase program and reaffirmed its commitment to its dividend, reflecting confidence in its financial stability despite the significant impact of the ABI impairment charge.
02—Key points
Key Highlights
- Reported a net loss of $2.72 billion for Q3 2021, significantly impacted by a $6.2 billion impairment charge on the ABI investment.
- Adjusted diluted EPS was $1.22, up 2.5% year-over-year, indicating underlying operational strength.
- Smokeable products segment reported OCI increased 3.8% year-over-year, driven by pricing actions offsetting shipment volume declines.
- Oral tobacco products segment OCI decreased 7.1% year-over-year due to unfavorable product mix and higher costs.
- The company sold its wine business (Ste. Michelle) for approximately $1.2 billion, completing the transaction on October 1, 2021.
- Altria increased its quarterly dividend rate by 4.7% to $0.90 per share.
- The share repurchase program was expanded by $1.5 billion, with $1.03 billion remaining as of September 30, 2021.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q3 FY2021, Altria Group, Inc. lost $0.40.
- Revenue$6.79B100.0%
- Cost of revenue−$3.11B45.9%
- Gross profit$3.67B54.1%
- Operating costs−$722.0M10.6%
- Operating income$2.95B43.5%
- Interest, other & tax−$5.67B83.6%
- Net income−$2.72B40.1%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2021filed October 28, 2021Financial Statements
Q3 FY2021 against Q3 FY2020
| Line item | Q3 FY2021Q3 FY2020 | Change |
|---|---|---|
| Revenue | $6.79B$7.12B | −4.7% |
| Cost of Revenue | $1.86B$1.96B | −5.3% |
| Gross Profit | $3.67B$3.72B | −1.2% |
| Operating Income | $2.95B$3.16B | −6.6% |
| Net Income | -$2.72B-$952.00M | −185.9% |
| EPS (Basic) | $-1.48$-0.51 | −190.2% |
| EPS (Diluted) | $-1.48$-0.51 | −190.2% |
| Shares Outstanding (Basic) | 1.84B1.86B | −0.9% |
| Shares Outstanding (Diluted) | 1.84B1.86B | −0.9% |
05—Questions
Frequently Asked Questions
What caused the significant net loss in the third quarter of 2021?
The primary driver of the net loss was a non-cash, pre-tax impairment charge of $6.2 billion recognized on Altria's equity investment in Anheuser-Busch InBev (ABI). This impairment was recognized because the decline in ABI's share price was deemed to be other than temporary.
How did Altria's core tobacco businesses perform?
The smokeable products segment showed resilience with a slight increase in reported Operating Companies Income (OCI) due to pricing actions offsetting lower shipment volumes. The oral tobacco products segment saw a decline in OCI, impacted by shifts in product mix towards newer oral nicotine pouch products and higher costs.
What is the outlook for shareholder returns, such as dividends and share repurchases?
Altria demonstrated its commitment to shareholder returns by increasing its quarterly dividend by 4.7% to $0.90 per share. Additionally, the company expanded its share repurchase program by $1.5 billion, indicating confidence in its financial position and future cash flows.
What significant divestiture did Altria complete?
Altria completed the sale of its wine business, Ste. Michelle Wine Estates, for approximately $1.2 billion. The transaction was finalized on October 1, 2021.
06—Continue