Impressive Growth In The Smokeable Products Segment Helps Altria Beat Estimates

Highlights Of The Quarter:

1) Impressive Growth In The Smokeable Products Segment

• Revenues, net of excise, grew 5.3%, benefiting from cost cutting measures and higher pricing.
• Margins also improved as a result by 170 basis points, to 48.1%.
• Despite moderate cigarette industry volumes declines, Altria managed to increase volumes, due to market share gains and an additional shipping day.
• Growth in retail share was witnessed in the discount brands, led by L&M.

2) Higher Prices And Improved Margins Lead To Growth In The Smokeless Products Division

• Higher net pricing and greater volume helped in the growth of this segment.
• The national expansion of Copenhagen Mint also aided in higher volumes.
• Copenhagen was the fastest-growing smokeless brand and the largest, growing its retail share by 1.1 percentage points to 32.4%.
• In e-vapor, Nu Mark continued to increase the distribution of MarkTen XL, with early marketplace results being encouraging.
• Altria is working with Philip Morris on an FDA application for iQOS — a product using the heat-not-burn technology.

3) Full-Year Guidance Was Reaffirmed

• Guidance of a full-year adjusted diluted EPS of $3-$3.05 was reaffirmed.
• It does not include any impact of the proposed AB InBev-SABMiller merger.
• Despite an impressive quarter, the guidance was not raised, mainly due to a possibility of higher state excise taxes.

Have more questions on Altria? Have a look at the links below:

• How Will Altria Perform In Q1 2016?
• What Are Altria’s Strengths Driving Long-Term Growth?
• What Are Some Obstacles To Altria’s Long-Term Growth?
• How Will Altria’s Revenue And EBITDA Change In The Next 3 Years?
• How Has Altria’s Revenue And EBITDA Composition Changed In The Last 5 Years?
• Altria: Year 2015 In Review
• How Has Altria’s Shipment Volume, By Brand, Changed Over The Past 3 Years?
• How Has Altria’s Retail Share In Smokable Products And Smokeless Products Changed Over The Last Year?
• What is Altria’s Revenue And EBITDA Breakdown?
• What is Altria’s Fundamental Value Based On Expected 2016 Results?
• By What Percentage Did Altria’s Revenue & EBITDA Grow In The Last 5 Years?

Notes: