RICHMOND, Va. — An increase in earnings per share (EPS) by 18.5%, the retirement of its CEO and the reopening of its manufacturing facility were among the noteworthy announcements made during tobacco maker Altria Group’s first-quarter earnings call.
In addition, net revenues increased 13.0% to $6.4 billion, primarily due to higher net revenues in its “smokable” or traditional combustible segments, such as cigarettes and cigars, as well as its oral tobacco products segments, officials said. Revenues net of excise taxes increased 15.0% to $5.0 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, the new CEO of the Richmond, Va.-based Altria. “We’ve approached these challenges together by focusing on the health and welfare of our employees, maintaining business continuity and supporting our communities.”
The company grew its first-quarter adjusted, diluted EPS by 18.5%, driven by the strength of its smokable and oral tobacco products segments, Gifford said.
During the April 30 earnings call, Altria officials also made several other announcements:
- Howard Willard, chairman of the board and CEO of Altria, retired as of April 17, with the board electing Gifford as Altria’s new CEO. In March, Willard took a leave of absence to recover from contracting the COVID-19 virus. He subsequently announced his retirement from the company.
- Altria has implemented remote working for many employees and aligned its practices with the recommended social distancing protocols from public health authorities. To date, Altria has experienced minimal impact on productivity due to remote working, and its critical information technology systems have remained operational.
- After closing its Richmond Manufacturing Center in mid-March due to coronavirus concerns, Altria reopened the tobacco factory in early April under enhanced safety protocols. All of Altria’s manufacturing facilities are currently operational. Altria officials said they continue to monitor the risks associated with facility disruptions and workforce availability as a result of COVID-19 uncertainty.
- To date, Altria’s companies have not experienced any material disruptions to their supply chains or distribution systems, but they continue to monitor these risks and are executing against business continuity plans.
- In March, Philip Morris USA (PM USA), an Altria subsidiary, closed its Atlanta and Richmond IQOS stores temporarily and paused its IQOS in-person marketing efforts. IQOS is a heat-not-burn device that is an alternative to traditional cigarettes. PM USA will consider guidance from public health authorities in deciding when to reopen the stores and resume its interactive marketing approach. Its HeatSticks, or compressed tobacco sticks that are inserted into the IQOS device, remain available for sale in more than 500 retail stores across Atlanta and Richmond, with the company saying it has sufficient on-hand inventories. The company has also delayed the launch of IQOS in Charlotte, N.C., due to COVID-19 concerns.