Altria Reaffirms Full Year 2024 Earnings Outlook

Image: Shares of Altria have faced pressure during the past couple years, but its dividend yield is too hard to pass up, in our view.

By Brian Nelson, CFA

On April 25, Altria (MO) reported mixed first-quarter results. Net revenue fell 2.5% as a result of weak performance across its smokeable products segment, which was only partially mitigated by expansion in its oral tobacco products segment. Adjusted diluted earnings per share fell 2.5%, to $1.15 per share, which was in-line with expectations. Shipment volume of NJOY consumables was 10.9 million units, while shipment volume of NJOY devices was 1.0 million units. Management had the following to say in its update in the quarterly release:

We made meaningful progress in pursuit of our Vision, and our highly profitable traditional tobacco businesses continued to perform well in a challenging environment. In spite of the absence of an effective regulatory environment, we saw continued early momentum from NJOY and believe our businesses are on track to deliver against full-year plans. We also demonstrated our continued commitment to maximizing the return on our investments and delivering strong shareholder returns through the sale of a portion of our investment in ABI and the subsequent expansion of our share repurchase program in March. 

Looking ahead to full-year 2024, management is targeted diluted earnings per share in the range of $5.05-$5.17, which implies a growth rate of 2%-4.5% from the $4.95 mark it achieved in 2023. The executive team expects bottom-line growth to be weighted toward the back half of the year. In March, the company sold a part of its ownership position in Anheuser-Busch Inbev (BUD), of which it still retains an 8.1% stake. Management continues to buy back stock at an accelerated pace, as it pays a lofty dividend yield. Though Altria won’t win any awards for ESG, the company’s ~9.1% dividend yield is too hard to pass up, in our view.