Altria Reports Quarterly Results Below Expectations Due to Weak Cigarette Demand, According to Reuters

Altria has fallen short of expectations for its quarterly revenue and profit, as the tobacco company faces ongoing challenges with declining demand for its cigarette brands.

Despite a 25% rise in its shares this year, they saw a 2% drop in premarket trading following the news. Like its competitors, Altria has heavily invested in alternatives to smoking, aiming to adapt to stricter regulations and heightened health awareness that have negatively affected demand for conventional cigarettes in various markets.

During the second quarter, total cigarette shipments plummeted by 13%, with demand for premium brands pressured by consumers opting for more affordable alternatives and vaping products amid tight budgets. The company also cited its promotional efforts as a factor that impacted revenue.

Altria reported adjusted earnings per share of $1.31, which fell short of the anticipated $1.35. Quarterly revenue, after excise taxes, declined by 3% to $5.28 billion, missing the forecast of $5.39 billion.

In a positive development, Altria’s menthol-flavored NJOY vape products received sale authorization from the U.S. Food and Drug Administration, marking them as the first flavored vapes to achieve this status last month. Additionally, reported shipment volumes for NJOY devices saw an 80% increase compared to the previous quarter.

However, competition remains fierce within the vaping market, particularly from low-cost disposable alternatives. In terms of oral tobacco products, Altria has experienced several quarters of declining sales in traditional dipping tobacco, such as Copenhagen.

On a brighter note, the shipment volume for on! nicotine pouches surged by 37.3% compared to a year earlier, following a 32% increase in the prior quarter.

Altria has updated its annual profit per share forecast to a range of $5.07 to $5.15, slightly narrowing from its earlier target of $5.05 to $5.17.