Shares of Altria Group (MO 0.72%) climbed on Thursday after the tobacco titan's profits surpassed investors' expectations.
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Consistent earnings growth despite challenging market dynamics
Altria's revenue net of excise taxes rose 5.3% year over year to $4.8 billion in the first quarter. The gains were driven by a 5.2% rise in the cigarette maker's smokeable products revenue net of excise taxes, to $4.1 billion.
Altria has long relied on price increases to offset declining smoking rates. It's a tried-and-true formula that's worked for many years, but it has its limits. Like all consumers, smokers have limited budgets, particularly with gasoline prices near multi-year highs.
NYSE: MO
Key Data Points
These industry dynamics are prompting Altria to invest in oral tobacco products, such as its on! Plus nicotine pouches. On! shipment volumes jumped 17.6% in the first quarter.
"On! performed well in a highly competitive marketplace," CEO Billy Gifford said.
All told, Altria's adjusted earnings per share grew by 7.3% to $1.32. That bested Wall Street's projections, which had called for per-share profits of $1.25.
Altria remains a dividend stalwart
The company continues to expect full-year earnings per share to grow by 2.5% to 5.5%, to a range of $5.56 to $5.72.
Management is committed to passing much of these profits on to shareholders. Altria paid $1.8 billion in dividends to investors in the first quarter alone. Its stock currently yields a solid 5.8%.
