Altria Group Reports 49.4% Decline in Net Earnings for Q1 2025

Altria Group, Inc. reported a significant decline in its financial performance for the first quarter of 2025, with net earnings of $1.077 billion, a decrease of 49.4% compared to $2.129 billion in the same period last year. The company's diluted earnings per share fell to $0.63 from $1.21, reflecting a 47.9% drop. The decline was attributed primarily to a non-cash goodwill impairment charge of $873 million related to its e-vapor reporting unit, as well as lower operating income and unfavorable results from investments in equity securities.

Total net revenues for the quarter were $5.259 billion, down 5.7% from $5.576 billion in the prior year. This decrease was driven by a 5.8% decline in the smokeable products segment, which reported revenues of $4.622 billion, and a slight increase in the oral tobacco products segment, which generated $654 million. The company also noted a decrease in excise taxes on products, which fell by 13.9% to $740 million, reflecting lower shipment volumes.

In terms of operational developments, Altria's total cigarette shipment volume decreased by 13.7%, with Marlboro's market share dropping to 41.0%, down from 42.0% a year earlier. The company reported that the e-vapor category grew by approximately 30% over the past year, driven largely by illicit flavored disposable products, which now account for over 60% of the e-vapor market. The company is facing challenges from regulatory actions, including an exclusion order from the U.S. International Trade Commission prohibiting the sale of its NJOY ACE product, which became effective on March 31, 2025.

Strategically, Altria has been active in share repurchase programs, with a new $1 billion program authorized in January 2025, of which $674 million remains available. The company repurchased 5.7 million shares at an average price of $56.97 during the first quarter. Additionally, Altria continues to focus on its Optimize & Accelerate initiative aimed at modernizing operations, which has incurred implementation costs of $15 million in the first quarter.

Looking ahead, Altria anticipates ongoing pressures on adult tobacco consumers due to high prices and inflation, which may influence purchasing behavior. The company is also monitoring the impact of regulatory changes and the competitive landscape, particularly in the e-vapor and oral nicotine categories. Despite the challenges, Altria remains committed to its vision of transitioning adult smokers to smoke-free alternatives and is focused on executing its strategic initiatives to achieve this goal.