In Q4 Altria achieved USD 4.8 billion in revenues net of excise taxes, an increase of 0.3 per cent compared to the previous year. For the full year, the company saw an increase of 0.9 per cent, bringing the total revenues net of excise to USD 19.7 billion. These increases come despite a 7.4 per cent increase in diluted earnings per share (EPS), which the report defines as “losses”, for Q4 and an overall increase in EPS of 5.8 per cent for the year.
The report also stated that Altria achieved USD 600 million in annualised cost savings, exceeding the USD 575 million target set by the Cost Reduction Program started in December 2018. The company also announced that it has revised the terms for investment in JUUL, including a restructuring of the board of directors and the option to be released from its non-complete obligation if JUUL is prohibited from selling its e-vapour products in the US for at least a year.
For smokeable products, Altria’s Q4 revenues net of excise taxes were down by 0.5 per cent to USD 3.9 billion, which the report attributed primarily to lower shipment volumes. For the full year, revenues net of excise taxes increased by 0.7 per cent, to USD 16.8 billion. Domestic cigarette shipment volume dropped by 8.7 per cent, to 20.1 million sticks, in the fourth quarter and by 7.3 per cent, to 88.7 million sticks, for the full year. This was predominantly due to an overall industry decline, retail share losses and trade inventory movements.
Smokeless products, on the other hand, saw an increase in revenues net of excise taxes both for the fourth quarter and across the whole year. Q4 saw an increase of 6.1 per cent, at USD 574 million, and the full year saw an increase of 5.1 per cent, at USD 2.2 billion. However, the report also stated that domestic shipment volume of smokeless products decreased, due to an overall industry decline. Q4 dropped by 4 per cent, with 199.5 million cans and packs being shipped, and the full year volume dropped by 3.1 per cent, to 807 million cans and packs.
According to Altria’s Chairman and Chief Executive Officer, Howard Willard, “Altria’s core tobacco businesses delivered outstanding performance in 2019. In addition, Altria exceeded its USD 575 million annualized cost savings target.” He said of the revised JUUL terms, “This agreement is a continuation of the reset initiated by JUUL’s leadership team. We look forward to working with the company under this structure to support JUUL’s commitment to working with regulators and submitting the best possible PMTA.”