Altria’s Quarterly Results Highlight Persistent Challenges Amid Revenue Beat

Altria Group's latest financial report presents investors with a familiar dichotomy. While the tobacco giant's revenue performance exceeded forecasts, underlying pressures on profitability and its core business units continue to fuel market skepticism. The fourth-quarter 2025 figures underscore that for shareholders, the sustainability of the business model is as critical as the top-line numbers.

Looking ahead to 2026, Altria provided adjusted earnings per share (EPS) guidance in the range of $5.56 to $5.72. This projection implies year-over-year growth of 2.5% to 5.5%, a modest yet solid outlook that reflects a company focused on stabilizing earnings in a challenging environment. Concurrently, the company announced a forthcoming leadership change: Chief Executive Officer Billy Gifford is set to retire on May 14, 2026. Following the annual shareholder meeting, current Chief Financial Officer Salvatore Mancuso will assume the CEO role.

The company reaffirmed its commitment to shareholder returns, targeting a "progressive" dividend policy with annual dividend growth in the mid-single-digit percentage range through 2028. Furthermore, approximately $1 billion remained available under its ongoing share repurchase program at year-end.

A Closer Look at Q4 and Full-Year 2025 Performance

The company's results for the final quarter of 2025 were mixed. Altria reported adjusted diluted earnings per share of $1.30, matching the prior-year period but narrowly missing the consensus analyst estimate of $1.32.

On the revenue front, the picture was brighter. Net revenues, which exclude excise taxes, climbed to $5.08 billion, surpassing expectations of $5.02 billion. However, the officially reported revenue figure, which includes excise taxes, declined by 2.1% to $5.84 billion. This divergence highlights Altria's ongoing pricing power, yet also reveals its inability to fully offset declining shipment volumes through price increases alone.

Should investors sell immediately? Or is it worth buying Altria?

For the full 2025 fiscal year, Altria posted an adjusted EPS of $5.42, representing a 4.4% increase over 2024.

Volume Declines and Competitive Pressures Intensify

The core cigarette business remains Altria's most significant headwind. Domestic cigarette shipment volumes fell by 7.9% in the fourth quarter. Management attributed this drop to the industry's structural decline, exacerbated by the growing prevalence of illicit e-vapor products in the U.S. market, which are siphoning off demand.

Pressure is also mounting in the smokeless segment. The market share for Altria's on! oral nicotine pouches contracted to approximately 13%, a result the company attributes to intense competition, notably from brands like Philip Morris International's Zyn. Simultaneously, the company continues to navigate regulatory challenges for its NJOY e-cigarette brand, following the imposition of import restrictions by trade regulators in 2025.

Key Data Summary:
* Q4 2025 Adjusted EPS: $1.30 (Estimate: $1.32)
* Q4 Net Revenues (ex. excise taxes): $5.08 billion (Estimate: $5.02 billion)
* U.S. Cigarette Volume Change: -7.9%
* 2026 Adjusted EPS Guidance: $5.56 – $5.72

The market's reaction to these nuanced results has been muted, with shares trading at $61.55—only about 3.3% below their 52-week high. This suggests that much of the current challenge is already reflected in the stock's valuation. The primary focus for investors now is whether Altria can reliably deliver on its 2026 earnings targets despite the persistent downward trend in cigarette volumes.