Altria misses EPS estimates but boosts dividend amid shipment decline
Tobacco giant reports $5.8B revenue beat, warns of 10% cigarette shipment decline
Altria Group shares slipped in pre-market trading Thursday after the tobacco giant reported quarterly earnings that missed analyst estimates, despite exceeding revenue expectations and announcing a dividend increase.
The maker of Marlboro cigarettes reported fourth-quarter adjusted earnings per share of $1.30, falling short of the $1.45 consensus forecast, according to StreetInsider. However, revenues net of excise taxes reached $5.08 billion, beating the $5.02 billion analyst consensus, the company reported.
For the full year 2025, Altria delivered adjusted diluted EPS of $5.42, representing 4.4% growth over the prior year. The company issued 2026 guidance projecting adjusted EPS between $5.56 and $5.72, suggesting growth of 2.5% to 5.5%.
"We delivered solid financial results in 2025 and returned significant capital to shareholders while investing in our business and innovation pipeline," Altria said in its earnings announcement.
The mixed performance reflected ongoing challenges in the traditional tobacco business. Cigarette shipments declined 10% year-over-year in the fourth quarter, underscoring the persistent headwinds facing traditional tobacco products as smoking rates continue to decline in the United States.
The company recorded a $1.3 billion impairment charge related to its e-vapor segment, highlighting the challenges facing its next-generation products portfolio. Altria has been investing heavily in reduced-risk alternatives to offset declining cigarette sales, but those efforts have faced regulatory hurdles and market adoption challenges.
Despite the operational headwinds, Altria returned approximately $8.8 billion to shareholders in 2025 through dividends and share repurchases. The company's board of directors approved a $2 billion share repurchase program and increased the quarterly dividend by 3.9% to $1.06 per share, bringing the annualized dividend to $4.24 per share.
Altria's ability to maintain and grow shareholder returns through challenging market conditions has been a key attraction for income investors. The stock currently offers a dividend yield of approximately 6.5%, well above the broader market average.
Shares of Altria have gained 10.4% since the company's third-quarter earnings report, reflecting investor confidence in the company's cash generation capabilities and strategic transition toward reduced-risk products. The stock was trading near the upper end of its 52-week range of $46.73 to $66.30 before Thursday's pre-market decline.
Analysts remain cautiously optimistic on Altria's prospects. The stock currently has a consensus price target of $62.92, according to market data, with ratings split among buy, hold, and sell recommendations. The company's relatively low valuation, with a forward price-to-earnings ratio of approximately 11.25, provides some downside protection even as growth remains modest.
Looking ahead, investors will be watching for progress in Altria's smokeless tobacco and heated product segments, which have shown more resilience than traditional cigarettes. The company's ability to successfully execute its diversification strategy while maintaining its industry-leading dividend payout will be critical factors in determining the stock's performance in 2026.