Altria falls as the transition to a smoke-free future plays out in its earnings results

Altria Group (NYSE:MO) reported revenue fell 4.6% year-over-year to $6.21 billion. The drop was primarily driven by lower net revenue in the smokeable products segment, partially offset by higher net revenues in the oral tobacco products segment. Revenues net of excise taxes decreased 3.0% to $5.3 billion. Total cigarette revenue in Q2 fell 13% to $17.9 billion.

EPS for the quarter was reported at $1.31 vs. $1.34 consensus and $1.31 a year ago, as lower adjusted OCI was offset by fewer shares outstanding.

“Altria’s momentum continues to build as we pursue our Vision to responsibly lead the transition of adult smokers to a smoke-free future,” noted Altria (MO) CEO Billy Gifford. “In the second quarter, our companies’ innovative smoke-free products delivered strong share and volume performance, and we hit meaningful milestones that we believe set us up for future success,” he added.

During Q2, Altria (MO) highlighted that NJOY received the first and only marketing granted orders from the FDA for menthol e-vapor products, and the company submitted PMTA applications to the FDA for next generation NJOY and on! products.

Altria (MO) had $990 million remaining at the end of the quarter under its currently authorized $3.4 billion share repurchase program. The buyback program is expected to be complete by December 31. Altria (MO) noted that share repurchases depend on marketplace conditions and other factors.

Looking ahead, Altria (MO) narrowed its guidance for full-year adjusted EPS to be in a range of $5.07 to $5.15 vs. $5.10 consensus, representing a growth rate of 2.5% to 4.0% from a base of $4.95 in 2023. The company expects adjusted diluted EPS growth to be weighted to the second half of the year. The EPS guidance range includes planned investments, such as marketplace activities supporting smoke-free products and continued smoke-free product research, development and regulatory preparation expenses.

In terms of buybacks, after the completion of the ASR program, Altria (MO) expects to have $1 billion remaining under the currently authorized $3.4B share repurchase program, which the Richmond-based company expects to complete by December 31, 2024.

Shares of Altria Group (MO) fell 3.10% in premarket trading. Rival Philip Morris International (PM) was down 0.47%.