Altria Group (MO) Q3 2024 earnings summary

Executive summary

• Achieved strong Q3 2024 results with adjusted diluted EPS up 7.8% year-over-year to $1.38, driven by robust performance in both smokable and oral tobacco segments, and reaffirmed full-year guidance for 2.5%–4% EPS growth.

• Net earnings for the nine months ended September 30, 2024, rose 35.5% to $8.2 billion, primarily due to a $2.7 billion gain from the sale of IQOS System rights and favorable equity investment results.

• Continued momentum in smoke-free products, notably NJOY and on! nicotine pouches, with significant volume and share gains.

• Launched the Optimize & Accelerate initiative targeting at least $600 million in cost savings over five years, with plans to reinvest savings into business growth.

• Increased dividends by 4.1% and continued share repurchases, marking the 59th dividend increase in 55 years.

Financial highlights

• Q3 adjusted diluted EPS was $1.38, up 7.8% year-over-year; nine-month adjusted diluted EPS was $3.84, up 1.6%.

• Net revenues for the nine months ended September 30, 2024, were $18.0 billion, down 2.5% year-over-year, mainly due to lower smokeable product sales.

• Paid $1.7 billion in Q3 dividends and $5.1 billion YTD; $680 million in Q3 share repurchases and $3.1 billion YTD.

• Debt-to-EBITDA ratio at 2.1x as of September 30, 2024.

• Q3 operating companies income (OCI) increased 2.8% to $3.3B; nine-month OCI decreased 5.3% to $8.9B.

Outlook and guidance

• Reaffirmed 2024 full-year adjusted diluted EPS guidance of $5.07–$5.15, representing 2.5%–4% growth from 2023.

• Expects at least $600 million in cumulative cost savings over five years from the Optimize & Accelerate initiative, with $100–$125 million in pre-tax charges.

• Capital expenditures for 2024 are expected to be $125–$175 million.

• 2024 adjusted effective tax rate expected in the 24%–25% range.

• Plans to maintain a debt-to-EBITDA ratio near 2.0x and a total adjusted OCI margin of at least 60% annually through 2028.