Altria Group, Inc.
MO · NYSE
Next quarter
Reports Oct 29, 2026, before the open.
Consensus is $1.50 EPS for Sep 2026 across 5 estimates, ranging $1.48 to $1.53.
MO Jun 2026
- 1.33%
- +0.57%
- $1.50
- $1.48
- —
- $6.11B
Reported results
- $6.11B
- 62.51%
- $3.14B
- 51.32%
- $2.30B
- $1.37
Highlights
- Adjusted EPS: Altria reported second-quarter adjusted diluted EPS of $1.48, up 2.8% year over year but 1.33% below the $1.50 consensus; GAAP diluted EPS was $1.37, down 2.8%.
- Guidance: Full-year adjusted diluted EPS guidance was narrowed to $5.61-$5.72, or 3.5%-5.5% growth from $5.42 in 2025, with the lower end raised.
- Revenue and profit: Net revenue was $6.11 billion, essentially flat year over year and up from $5.43 billion in Q1; operating income was $3.14 billion versus $3.23 billion a year ago and $2.96 billion in Q1.
- Smokeable products: Segment adjusted OCI increased 2.4% to $3.02 billion, with margin up 0.3 percentage points to 64.8%, despite adjusted domestic cigarette volume falling 4.5%.
- Premium-to-discount shift: Marlboro shipment volume fell 7.4% and retail share declined 1.5 points to 39.5%, while discount cigarette volume rose 67.3% and discount category share increased 2.6 points to 33.8%.
- Oral tobacco weakness: Adjusted OCI declined 8.0% to $460 million and margin fell 2.0 points to 66.7%; segment volume decreased 8.5%, although on! retail share rose 0.3 points to 8.6% in the quarter.
- Smoke-free expansion: Helix expanded on! PLUS to 120,000 stores, resumed 12-milligram shipments in three states and plans national expansion in Q3 plus new flavors and strengths beginning in Q4.
- Shareholder returns: Altria returned nearly $3.9 billion in the first half through $3.6 billion of dividends and $335 million of repurchases; $665 million remained under its $2 billion buyback authorization at June 30.
- Investment and restructuring costs: The quarter included $88 million of pre-tax exit and implementation charges, primarily for the USSTC facilities consolidation, and $95 million of tobacco and other litigation charges.
Analysis
Altria’s June quarter was a modest underlying-growth print that narrowly missed expectations, with adjusted diluted EPS of $1.48 versus the $1.50 consensus and up from $1.44 a year ago. Net revenue of $6.11 billion was essentially unchanged from $6.10 billion in Q2 2025, while operating income of $3.14 billion declined from $3.23 billion and net income fell to $2.30 billion from $2.38 billion. Sequentially, revenue, operating income and net income improved from $5.43 billion, $2.96 billion and $2.18 billion in Q1, respectively, though the comparison is affected by the different mix of special items and the company’s use of adjusted EPS for guidance.
The central tension was resilient cigarette profitability against worsening oral tobacco trends. Smokeable adjusted OCI rose 2.4% on pricing and import-duty refunds, but cigarette volume declined 4.5% after trade-inventory adjustments as consumers traded toward discount products. Oral adjusted OCI fell 8.0% on lower volume and heavier promotion, even as on! gained quarterly share. Management raised the low end of full-year adjusted EPS guidance to $5.61-$5.72 and increased 2026 capital expenditure guidance to $375-$450 million for the USSTC manufacturing consolidation. First-half adjusted EPS rose 4.9% to $2.80, supported by higher operating income and fewer shares, while nearly $3.9 billion was returned to shareholders.
Guidance and earnings quality
Altria delivered modest underlying earnings growth but reported GAAP results were pressured by special items. Adjusted EPS rose 2.8% to $1.48, driven by higher adjusted operating companies income and fewer shares outstanding. GAAP EPS fell 2.8% to $1.37, reflecting $88 million of exit and implementation costs, $95 million of tobacco and other litigation charges, $77 million of ABI-related losses and $23 million of amortization, partly offset by a $42 million tax benefit. The reported effective tax rate fell to 21.5% from 23.7% a year ago, while the adjusted rate was 23.0%.
- First-half progress: Adjusted EPS increased 4.9% to $2.80 on net revenue growth of 1.6% to $11.54 billion; reported EPS increased 30.9% to $2.67, primarily because the prior-year period included an $873 million e-vapor goodwill impairment.
- Full-year outlook: Adjusted EPS guidance is now $5.61-$5.72, representing 3.5%-5.5% growth from the $5.42 2025 base; the company expects cigarette import and export benefits to be more evenly distributed between Q3 and Q4.
- Investment spending: 2026 capital expenditure guidance increased to $375-$450 million from $300-$375 million, primarily to support the USSTC facilities consolidation.
Smokeable products
Smokeables remained the earnings anchor. Net revenue rose 0.7% to $5.39 billion and revenue net of excise taxes increased 2.0% to $4.66 billion. Adjusted OCI grew 2.4% to $3.02 billion as pricing and higher refunds of taxes and duties on imported cigarettes more than offset lower volume, promotional investment, discount mix and higher costs. Adjusted OCI margin expanded 0.3 points to 64.8%.
- Volume pressure: Domestic cigarette shipment volume declined 3.2% as reported, or an estimated 4.5% after adjusting for trade inventories, compared with an estimated 5% decline for the total domestic cigarette industry.
- Marlboro: Shipment volume fell 7.4%; retail share of the total cigarette category declined 1.5 points to 39.5%, although premium-segment share held at 59.6%.
- Discount migration: Discount cigarette volume rose 67.3% and discount retail share increased 2.6 points to 33.8%, reflecting pressure on adult nicotine consumers’ discretionary income.
- Other products: Reported cigar shipment volume increased 5.0% to 503 million units.
Oral tobacco products
Oral tobacco was the clearest operating weakness. Net revenue declined 5.3% to $713 million and revenue net of excise taxes fell 5.2% to $690 million. Adjusted OCI dropped 8.0% to $460 million as lower shipment volume and increased promotional investment outweighed pricing, pushing adjusted OCI margin down 2.0 points to 66.7%. The segment also absorbed $79 million of asset, exit and implementation costs, primarily tied to the USSTC facilities consolidation.
- Volume: Reported domestic shipment volume declined 8.5% to 181.7 million cans; after adjusting for trade inventories, management estimated the decline at 2%.
- Legacy brands: Copenhagen volume fell 10.9% and Skoal volume declined 13.7%; their retail shares fell 2.8 points and 1.0 point, respectively.
- on! performance: on! volume declined 4.2% in the quarter but increased 5.1% in the first half; quarterly retail share rose 0.3 points to 8.6%, while first-half share was down 0.3 points to 8.2%.
- Category transition: Nicotine pouches represented 59.9% of the oral tobacco category, up 8.1 points year over year, while total oral industry volume grew an estimated 6% in the first half.
on! PLUS rollout
Altria continued to build its smoke-free oral platform despite the broader oral segment decline. Helix expanded on! PLUS distribution to 120,000 stores nationwide and resumed shipments of 12-milligram products in Florida, North Carolina and Texas across Mint, Wintergreen and Tobacco. A national rollout of the 12-milligram line is planned for the third quarter, followed by additional flavors and nicotine strengths in the fourth quarter.
- Near-term launches: Blueberry Mint and Mango Pineapple are planned as new on! PLUS flavors beginning in Q4 across 6-, 9- and 12-milligram strengths.
- Strategic context: Management is investing in on! PLUS while assuming NJOY ACE does not return to the U.S. marketplace in 2026; e-vapor industry growth is also reflected as moderated in the company’s guidance.
Capital returns and restructuring
Capital allocation remained a major part of the quarter’s message. Altria paid $1.8 billion of dividends and repurchased 0.8 million shares for $55 million in Q2, bringing first-half shareholder returns to nearly $3.9 billion. Cash provided by operating activities was $3.04 billion in the first half, versus $2.93 billion a year earlier, while total debt declined to $24.6 billion from $25.7 billion at year-end.
- Buybacks: First-half repurchases totaled 5.3 million shares for $335 million at an average price of $62.78; $665 million remained under the $2 billion authorization expiring December 31, 2026.
- USSTC consolidation: The company expects approximately $180 million of total pre-tax charges to move manufacturing from Nashville to a new Hopkinsville, Kentucky facility, with substantial completion targeted for Q1 2028; $78 million had been incurred by June 30.
- Other efficiency program: Optimize & Accelerate charges totaled $140 million since inception against an estimated $175 million, with the majority of remaining charges expected by the end of 2027.
