Altria Group (MO) Q2 2024 earnings summary

Executive summary

• Net earnings for the first half of 2024 rose 51.9% to $5.93B, driven by a $2.7B gain from the sale of IQOS rights and strong equity investment results, despite lower operating income and smokeable product declines.

• NJOY and on! delivered strong growth, with NJOY achieving FDA authorization for menthol e-vapor products and expanding retail presence, while on! shipment volume grew over 35% and retail share reached 8.1%.

• Traditional tobacco businesses remained resilient but faced volume declines due to macroeconomic pressures and illicit market challenges.

• Over $5.8B was returned to shareholders in the first half through dividends and share repurchases.

• A $354M non-cash impairment was recorded for the Skoal trademark due to declining MST volumes and increased competition from oral nicotine pouches.

Financial highlights

• Adjusted diluted EPS was flat at $1.31 for Q2 and declined 1.6% to $2.46 for the first half; full-year adjusted EPS guidance narrowed to $5.07–$5.15, representing 2.5%–4% growth over 2023.

• Net revenues for the first half fell 3.6% to $11.79B, mainly due to lower smokeable product volumes; operating income dropped 8% to $5.21B.

• Segment adjusted OCI for smokable products declined 2.3% in the first half to $5.3B, while oral tobacco adjusted OCI grew 3.1%.

• $145M in adjusted equity earnings from ABI in Q2, up 9.8% year-over-year.

• Dividend payments totaled $3.42B in the first half, up 1.6% from the prior year.

Outlook and guidance

• Full-year 2024 adjusted diluted EPS guidance narrowed to $5.07–$5.15, with growth expected in the second half due to operational tailwinds, two extra shipping days, and cost benefits.

• Management targets mid-single digit adjusted diluted EPS CAGR through 2028 and aims to double U.S. smoke-free net revenues to $5B by 2028.

• Continued investment in smoke-free products and expectation of long-term profitability in both traditional and innovative segments.

• Adjusted effective tax rate forecasted at 24.0%–25.0% for 2024.