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Dec 31, 2019
Altria Q4 2019 Earnings Report
Altria's fourth-quarter earnings were impacted by a significant impairment charge related to its investment in JUUL, but its core tobacco businesses demonstrated strong performance.
Key Takeaways
Altria reported a net loss due to a $4.1 billion impairment charge on its JUUL investment, though its core tobacco businesses performed well. The company exceeded its cost savings target and increased its dividend. Altria is revising its terms of investment in JUUL and focusing on pre-market tobacco product applications.
Altria's core tobacco businesses delivered outstanding performance in 2019.
Altria exceeded its $575 million annualized cost savings target.
Altria increased the dividend for the 54th time in 50 years
Altria recorded a fourth-quarter, non-cash pre-tax impairment charge of $4.1 billion related to its investment in JUUL.
Altria
Altria
Altria Revenue by Segment
Revenue by Segment
Smokeable Products Revenue
CapyFin.comOral Tobacco Products Revenue
CapyFin.comOther Revenue
CapyFin.com Forward Guidance
Altria expects its 2020 full-year adjusted diluted EPS to be in a range of $4.39 to $4.51, representing a growth rate of 4% to 7% from an adjusted diluted EPS base of $4.22 in 2019.
Positive Outlook
- Increased investments related to PM USA’s commercialization efforts for IQOS
- Helix’s plans to manufacture and expand U.S. distribution of on!
- One extra shipping day in the first quarter.
- Altria expects its 2020 full-year adjusted diluted EPS to be in a range of $4.39 to $4.51
- Altria expects its 2020 full-year adjusted effective tax rate will be in a range of 23.5% to 24.5%
Challenges Ahead
- Estimated per share charges in 2020 of $0.05 of tax expense resulting from the Tax Cuts and Jobs Act (Tax Reform Act) related to a tax basis adjustment to Altria’s ABI investment
- Altria expects the 2020 full-year total domestic cigarette industry adjusted volume decline rate to be in a range of 4% to 6%, which includes the impact of federal legislation raising the minimum age to purchase all tobacco products to 21.
- Altria expects continued volatility across tobacco categories and will no longer provide a multi-year forecast for U.S. cigarette volume declines.
- unfavorable litigation outcomes
- government, including U.S. Food and Drug Administration (FDA), and private sector actions that impact adult tobacco consumer acceptability of, or access to, tobacco products
Revenue & Expenses
Visualization of income flow from segment revenue to net income