Altria Group beats market expectations for third-quarter revenue and profit, as robust demand for its nicotine pouches and e-cigarettes helped soften the hit to its cigarettes category.
Altria's vapes and on! nicotine pouches have seen steady demand in the United States, with its menthol flavoured NJOY vape products receiving authorisation from the US Food and Drug Administration for sale.
Big tobacco's bet on alternatives to traditional cigarettes is being watched closely by investors as companies such as Altria and its peers deal with weak demand for cigarettes and face stiff competition from local brands for vapes.
The company said in July it had sent data to the FDA on growth in illegal nicotine pouches, which it said depicted early stages of a massive black market for vapes.
Domestic cigarette shipment volume in the smokeable products segment fell 8.6% in the third quarter, while NJOY devices reported shipment volume increased over 100% year-over-year to 1.1 million units.
Shipment volume for on! nicotine pouches rose 46% in the quarter, while demand continued to weaken for the company's chewing tobacco products such as Copenhagen.
Long-Term Plan
Altria also unveiled a long-term plan to increase operational efficiency through generative artificial intelligence and automation.
The company added that initial phases of the plan were expected to deliver at least $600 million in cost savings over the next five years.
Quarterly revenue net of excise taxes rose 1.3% to $5.34 billion. Analysts had expected $5.33 billion, according to data compiled by LSEG.
Altria's third-quarter adjusted earnings per share of $1.38 topped market expectations of $1.35.
The company maintained its annual profit forecast of between $5.07 and $5.15 per share.
Last week, peer Philip Morris lifted its annual profit target betting on strength in demand for its flagship IQOS heated tobacco device as well as ZYN nicotine pouches.
