Altria Group Inc (NYSE:MO) Reports Q3 2025 Earnings Miss, Stock Falls 4%

Altria Group Inc (NYSE:MO) Reports Q3 2025 Earnings: Mixed Results Amid Challenging Market Conditions

Earnings Performance Versus Estimates

Altria Group Inc has released its third-quarter 2025 financial results, revealing a performance that fell short of analyst expectations on key metrics. The tobacco giant reported adjusted earnings per share of $1.45 for the quarter, missing the consensus estimate of $1.49. This represents a 3.6% increase from the $1.40 reported in the same period last year but fell approximately 2.8% below what market analysts had projected.

Revenue performance also presented challenges, with the company reporting revenues net of excise taxes of $5.251 billion, compared to analyst expectations of $5.468 billion. This represents a 1.7% decline from the prior year period and came in roughly 4% below estimates. The revenue shortfall was primarily driven by lower net revenues in both the smokeable and oral tobacco products segments.

Key financial metrics from the quarter include:

• Adjusted diluted EPS: $1.45 (vs. $1.49 estimate)
• Revenues net of excise taxes: $5.251B (vs. $5.468B estimate)
• Net revenues: $6.072B, down 3.0% year-over-year
• Reported diluted EPS: $1.41, up 5.2% from prior year

Market Reaction and Price Action

The market response to Altria's earnings release has been notably negative, with the stock trading down approximately 4% in pre-market activity following the announcement. This reaction reflects investor disappointment with both the earnings miss and the ongoing challenges in the company's core tobacco businesses. The pre-market decline adds to recent pressure on the stock, which has declined about 6.5% over the past month as investors anticipated the quarterly results amid a challenging operating environment for tobacco companies.

Updated Guidance and Shareholder Returns

Despite the quarterly miss, Altria demonstrated confidence in its full-year outlook by narrowing its 2025 adjusted diluted EPS guidance to a range of $5.37 to $5.45, representing growth of 3.5% to 5.0% from the 2024 base of $5.19. This updated range suggests the company expects stronger performance in the fourth quarter to compensate for the Q3 shortfall. The guidance compares to analyst estimates of $5.61 for the full year, indicating potential continued headwinds.

The company reinforced its commitment to shareholder returns through two key initiatives:

• Expanded share repurchase program from $1 billion to $2 billion, expiring December 31, 2026
• Continued dividend payments, with a recent 3.9% increase marking the 60th dividend increase in 56 years
• Current annualized dividend rate of $4.24 per share maintains Altria's position as a high-yield dividend stock

Business Segment Performance

Altria's smokeable products segment, which includes the flagship Marlboro brand, showed resilience despite volume challenges. The segment reported:

• Domestic cigarette shipment volume decreased 8.2%, primarily driven by industry decline rates and retail share losses
• Marlboro retail share declined to 40.4%, down 1.2 percentage points year-over-year
• Adjusted operating companies income margin improved to 64.4%, up 1.3 percentage points

The oral tobacco products segment faced its own challenges, with shipment volume decreasing 9.6% and net revenues declining 4.6%. However, the segment maintained strong profitability with adjusted OCI margins of 69.2%.

Strategic Initiatives and Future Outlook

CEO Billy Gifford highlighted the company's progress across its businesses, noting "Our core tobacco businesses remained resilient; we advanced our smoke-free portfolio; and we opened new pathways for long-term adjacent growth in international modern oral and U.S. non-nicotine innovation."

The company continues to invest in its smoke-free portfolio, including the recent launch of on! PLUS in multiple states and regulatory submissions for Ploom heated tobacco products. Additionally, Altria announced a strategic collaboration with KT&G Corporation to pursue growth opportunities in international modern oral nicotine products and U.S. non-nicotine products.

Conclusion

Altria's third-quarter results reflect the ongoing challenges in the tobacco industry, particularly from competitive pressures and changing consumer preferences. While the company continues to generate substantial cash flow and return capital to shareholders, the earnings miss and guidance that trails analyst expectations suggest headwinds may persist through year-end. Investors will be watching closely to see if the company's smoke-free initiatives can gain meaningful traction to offset declines in the traditional tobacco business.

For detailed earnings estimates and future projections, view Altria's earnings overview here.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. The information presented should not be interpreted as a recommendation to buy or sell any security. Readers should conduct their own research and consult with a qualified financial advisor before making investment decisions.