• Adjusted Diluted EPS Growth: Increased by 3.4% for the full year.
• Dividends and Share Repurchases: Over $10.2 billion returned to shareholders.
• NJOY Consumables Shipment Volume: Grew by more than 15% to 12.8 million units in Q4.
• NJOY Device Shipment Volume: Increased by more than 22% to 1.1 million units in Q4.
• Oral Nicotine Pouches Growth: Grew 9.6 share points year-over-year in Q4.
• on! Shipment Volume: Increased by more than 44% year-over-year to nearly 44 million cans in Q4.
• Smokeable Products Adjusted OCI Growth: 5.5% in Q4 and 2% for the full year.
• Smokeable Products Adjusted OCI Margins: Expanded to 61.2% in Q4 and 61.6% for the full year.
• Net Price Realization for Smokeable Products: 11.3% for Q4 and 10.1% for the full year.
• Domestic Cigarette Volume Decline: 8.8% in Q4 and 10.2% for the full year.
• Oral Tobacco Products Adjusted OCI Growth: 13% in Q4.
• Oral Tobacco Products Adjusted OCI Margins: Increased to 69.5% in Q4.
• ABI Adjusted Equity Earnings: $159 million for Q4, down 8.1% year-over-year.
• Total Debt-to-EBITDA Ratio: 2.1 times as of December 31.
• 2025 Adjusted Diluted EPS Guidance: Range of $5.22 to $5.37, representing 2% to 5% growth.

• Warning! GuruFocus has detected 5 Warning Sign with MO.

Release Date: January 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Altria Group Inc (NYSE:MO) reported a 3.4% growth in adjusted diluted earnings per share for the full year, demonstrating strong financial performance.
• The company returned over $10.2 billion to shareholders through dividends and share repurchases, highlighting its commitment to shareholder value.
• NJOY and on! smoke-free products showed encouraging performance with volume and share growth in their respective categories.
• Altria Group Inc (NYSE:MO) expanded NJOY's distribution to over 100,000 stores and achieved a 15% growth in NJOY consumables shipment volume in the fourth quarter.
• Helix, the company behind on!, achieved profitability ahead of its 2025 goal, indicating strong performance in the oral tobacco category.

Negative Points

• The widespread availability of illicit disposable e-vapor products is jeopardizing the long-term opportunity for tobacco harm reduction.
• Illicit products represent more than 60% of the e-vapor category, creating a challenging operating environment for responsible manufacturers.
• Altria Group Inc (NYSE:MO) is reassessing its smoke-free goals and NJOY targets due to the unexpected growth of the illicit e-vapor market.
• The ITC issued an exclusion order against NJOY's ACE product, which could limit FDA-authorized choices and impact public health.
• The smokeable products segment reported a decline in domestic cigarette volumes by 10.2% for the full year, reflecting shifts in consumer preferences.

Q & A Highlights

Q: Can you discuss the phasing of earnings growth for 2025, considering lower MSA costs and one less shipping day in the first quarter? A: William Gifford, CEO: We don't guide to the quarter, but nothing distorting is expected for 2025. We highlighted the one less shipping day in the first quarter to ensure understanding of its occurrence.

Q: With Marlboro's market share performance and discount share trends, how do you see consumer trends playing out through 2025? A: William Gifford, CEO: The cumulative impact of inflation is affecting consumers, evident in credit card usage. We'll monitor this, but feel good about our guidance. The illicit e-vapor market is impacting cross-category pressure, and regulatory enforcement is needed.

Q: What are the possible options for NJOY, and is a settlement with Juul on the table? A: William Gifford, CEO: There are pathways, including review by the trade representative. Public health should be a factor due to the market's illegal products. Settlement requires a reasonable party. We are considering pipeline products to meet consumer demands.

Q: Regarding the fourth patent issue with NJOY, when do you expect to receive approval for an SE application? A: William Gifford, CEO: It depends on finalizing changes to avoid infringing Juul's patent. The SE exemption process is more rapid, though not predictable.

Q: How do you view the growth of nicotine pouches in 2025, considering competitive dynamics? A: William Gifford, CEO: Growth depends on consumer shifts from other nicotine forms. We have a strong product with on! and are awaiting authorization for on! PLUS to engage consumers in smoke-free products.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.