Can Altria Sustain EPS Gains as Revenues Decrease 1.7% Y/Y?

Altria Group, Inc.’s (MO) ability to deliver 3.6% growth in adjusted earnings per share (EPS) to $1.45 in the third quarter of 2025 contrasts with a 1.7% year-over-year decline in revenues net of excise taxes to $5.25 billion. This divergence highlights how earnings held up despite ongoing revenue pressure. The improvement was driven primarily by higher adjusted operating companies income and a reduced share count.

On the operating side, profitability gains were largely margin-driven. In the smokeable segment, adjusted operating companies income rose 0.7%, supported by pricing gains and lower per-unit settlement charges, even as domestic cigarette shipment volumes declined more than 8%. Adjusted operating margins in smokeables expanded 130 basis points to 64.4%, helping offset the drag from lower volumes. The oral tobacco segment reflected a similar pattern, with adjusted margins improving 240 basis points to 69.2% despite a 4.3% decline in segment revenues.

The second major contributor to EPS growth was share repurchases. During the quarter, the company bought back 1.9 million shares, and through the first nine months had retired 12.3 million shares. Management cited fewer shares outstanding as a key factor behind the higher per-share earnings.

Taken together, pricing actions, margin expansion and share reduction supported EPS growth even as revenues declined, illustrating how earnings performance this quarter was largely shaped by profitability and capital return dynamics rather than top-line expansion.

Peers vs. MO: A Look at EPS Growth Backed by Revenue Momentum

Philip Morris International Inc. (PM) delivered 17.3% year-over-year growth in adjusted EPS in the third quarter of 2025, supported by a 9.4% increase in net revenues. Philip Morris benefited from strong pricing and rising volumes in smoke-free products, allowing it to expand both earnings and the top line simultaneously. Margin expansion also contributed meaningfully to Philip Morris’ earnings growth profile.

Turning Point Brands, Inc. (TPB) recorded 31.2% growth in consolidated net sales to $119 million and an 18.3% surge in net income to $19.6 million. Turning Point Brands adjusted EPS of $1.05, up from 91 cents a year earlier. Turning Point Brands achieved this growth through strong momentum in modern oral products and operating leverage, reflecting continued earnings expansion.

Altria’s Price Performance, Valuation & Estimates

Shares of Altria have gained 4.4% in the past month compared with the industry’s growth of 8.6%.

From a valuation standpoint, MO trades at a forward price-to-earnings ratio of 10.65X, down from the industry’s average of 14.52X.

The Zacks Consensus Estimate for MO’s 2025 earnings per share has inched up 1 cent in the past 30 days to $5.44, while the same for 2026 has slipped 1 cent to $5.56.

Altria currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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