Altria’s second quarter results were well received by the market, as the company surpassed Wall Street’s revenue and profit expectations despite flat sales year over year. Management attributed the performance to robust growth in the oral tobacco segment, particularly from the on! nicotine pouch brand, which led to substantial profit gains within the segment. CEO William Gifford emphasized the success of targeted marketing efforts and increased brand awareness for on!, noting that “on!’s improving financial performance drove the majority of the oral segment’s substantial profit growth for the quarter.” The company also cited disciplined price management and targeted efforts in the discount cigarette segment as important contributors.
Is now the time to buy MO? Find out in our full research report (it’s free).
Altria (MO) Q2 CY2025 Highlights:
- Revenue: $5.29 billion vs analyst estimates of $5.20 billion (flat year on year, 1.8% beat)
- Adjusted EPS: $1.44 vs analyst estimates of $1.38 (4% beat)
- Adjusted EBITDA: $3.34 billion vs analyst estimates of $3.27 billion (63.1% margin, 2.2% beat)
- Adjusted EPS guidance for the full year is $5.40 at the midpoint, roughly in line with what analysts were expecting
- Operating Margin: 61.1%, up from 48% in the same quarter last year
- Market Capitalization: $110.3 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Altria’s Q2 Earnings Call
- Matthew Edward Smith (Stifel) asked about the sustainability of earnings growth given legal and share repurchase impacts. CFO Salvatore Mancuso replied that inflation and consumer behavior remain unknowns but expressed satisfaction with first-half results and narrowed guidance.
- Bonnie Lee Herzog (Goldman Sachs) questioned the ability to achieve mid-single digit EPS growth long term. CEO William Gifford said the company remains disciplined in supporting consumers and adapting to persistent economic strain.
- Herzog (Goldman Sachs) also inquired about the Basic brand strategy and promotion changes. Gifford explained the use of advanced analytics for targeted discount brand expansion, aiming to retain consumers cost-effectively.
- Mirza Faham Ali Baig (UBS) sought clarity on the net impact of e-vapor enforcement and federal excise tax trends. Gifford responded that it’s too early to determine the impact, emphasizing the need for consistent regulatory action.
- Eric Adam Serotta (Morgan Stanley) asked if enforcement is causing shortages in illicit e-vapor brands and about the timing for NJOY’s market return. Gifford noted it’s early to call a trend but reiterated the company’s disciplined approach to product relaunches.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will monitor (1) the pace of regulatory enforcement and its effect on illicit e-vapor market share, (2) the adoption and profitability of new and existing smoke-free products like on! and the planned NJOY relaunch, and (3) consumer behavior in response to inflation and targeted pricing strategies. Progress in FDA product authorizations and the company’s response to evolving regulatory policies will also be key factors.
Altria currently trades at $65.70, up from $59.39 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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