Altria Group (MO) Tops Q1 EPS by 11c, Revenues Beat; Withdraws FY20 EPS Outlook, Suspends FY20-FY22 Growth Targets
Altria Group (NYSE: MO) reported Q1 EPS of $1.09, $0.11 better than the analyst estimate of $0.98. Revenue for the quarter came in at $6.36 billion versus the consensus estimate of $4.61 billion.
“The first-quarter brought out the best in Altria’s employees as we navigated the dynamic tobacco environment and the unprecedented effects of the COVID-19 pandemic,” said Billy Gifford, Altria’s Chief Executive Officer. “We’ve approached these challenges together by focusing on the health and welfare of our employees, maintaining business continuity and supporting our communities.”
“We had an excellent start to the year, growing our first-quarter adjusted diluted EPS by 18.5%, driven by the strength of our smokeable and oral tobacco products segments. Due to the uncertainties related to the impact of the COVID-19 pandemic on our diverse business model and economic recovery scenarios, we’re withdrawing our full-year 2020 adjusted diluted EPS guidance and, as a result, we’re also withdrawing our compounded annual adjusted diluted EPS growth objective. We’re continuing to assess the COVID-19 situation and intend to reestablish guidance at the appropriate time.”
“Our dividend is important to our investors and it remains a top priority for us. Our objective continues to be a dividend payout ratio target of approximately 80% of adjusted diluted EPS. For 2020, we expect to recommend a quarterly dividend rate to our Board that reflects, among other things, our strong cash generation and the strength of our balance sheet.”
2020 Full-Year Guidance and 2020 - 2022 Adjusted Diluted EPS Growth Objective
- Due to the uncertainties related to the impact of the COVID-19 pandemic and economic recovery scenarios, Altria withdraws its full-year 2020 adjusted diluted EPS guidance of $4.39 to $4.51 and, as a result, Altria also withdraws its 2020 to 2022 compounded annual adjusted diluted EPS growth objective of 4% to 7%. In making the decision, Altria considered various factors, including uncertain contributions from its equity investment in ABI and the potential impacts of COVID-19 on the macro-economic environment and adult tobacco consumers.
Altria maintains its 2020 estimated full-year domestic cigarette industry adjusted decline rate to be in a range of 4% to 6%.
Altria revises its expectation for 2020 capital expenditures to be between $200 million and $250 million. Altria maintains its expectation for depreciation and amortization expenses of approximately $240 million.
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