Summary
Altria Group, Inc. reported its financial results for the nine months and third quarter ended September 29, 2024. The company experienced a significant increase in net earnings driven by the $2.7 billion pre-tax gain from the sale of IQOS System commercialization rights and favorable investment income, particularly from its ABI stake. This surge in net earnings offset a decline in operating income, which was impacted by lower shipment volumes in the smokeable products segment and an asset impairment charge of $354 million on the Skoal trademark. Despite the strong reported net earnings, adjusted net earnings saw a slight decrease primarily due to lower operating companies income (OCI) in the smokeable products segment. The company continues its transition towards a smoke-free future, with its oral tobacco products segment showing growth, driven by its 'on!' nicotine pouch brand, while its NJOY e-vapor business is gaining market share. However, the overall tobacco industry faces headwinds from inflation impacting consumer discretionary income, the proliferation of illicit e-vapor products, and ongoing regulatory scrutiny.
Financial Highlights
49 data points| Revenue | $6.26B |
| Cost of Revenue | $1.54B |
| Gross Profit | $3.81B |
| Operating Income | $3.15B |
| Net Income | $2.29B |
| EPS (Basic) | $1.34 |
| EPS (Diluted) | $1.34 |
| Shares Outstanding (Basic) | 1.70B |
| Shares Outstanding (Diluted) | 1.70B |
Key Highlights
- 1Net earnings for the nine months ended September 30, 2024, increased by 35.5% to $8.225 billion, largely due to a $2.7 billion pre-tax gain from the sale of IQOS System commercialization rights.
- 2Adjusted net earnings decreased slightly by 1.5% to $6.637 billion for the nine months ended September 30, 2024, primarily due to lower adjusted operating companies income (OCI).
- 3The company recorded a $354 million pre-tax impairment charge on the Skoal trademark in the second quarter of 2024 due to declining sales volumes in the moist smokeless tobacco (MST) category.
- 4The oral tobacco products segment experienced a revenue increase of 4.6% for the nine months, driven by higher pricing and growth in the 'on!' nicotine pouch brand.
- 5The NJOY e-vapor business continues to grow, with market share increasing to 6.2% in the third quarter of 2024.
- 6Altria repurchased $3.09 billion of its common stock during the nine months ended September 30, 2024, as part of its share repurchase program.
- 7The company announced an "Optimize & Accelerate" initiative expected to deliver at least $600 million in cumulative cost savings over the next five years, with initial phases incurring approximately $100-125 million in charges.