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Marlboro-Maker Altria Posts Earnings Beat as Demand Spikes

Altria posts earnings that handily beat analysts’ forecasts amid ongoing demand for its smoking and smokeless products, though it beefs up its war chest amid the coronavirus pandemic.

Marlboro cigarette maker and Juul Labs stakeholder Altria  (MO) - Get Altria Group Inc. Report on Thursday reported earnings and sales that handily beat analysts’ forecasts amid ongoing demand for its smoking and smokeless products - though it beefed up its cash war chest by $3 billion amid the coronavirus pandemic.

The Richmond, Va.-based company said it earned $1.55 billion, or $1.09 an adjusted share, vs. $1.12 billion, or 92 cents a share, in the comparable year-ago quarter. Analysts polled by FactSet had been expecting earnings of 98 cents.

Revenue totaled $6.36 billion vs. $5.63 billion a year ago, well above analysts’ forecasts of $4.3 billion.

“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,” CEO Billy Gifford said in a statement.

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However, “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,” he said.

The company did bulk up on its cash position during the quarter, borrowing the full $3 billion capacity available under its revolving credit facility “as a precautionary measure.” It also rescinded its $1 billion stock buyback program.

With respect to its controversial investment in e-cigarette maker JUUL, Altria said it intends to “vigorously defend” the transaction after the Federal Trade Commission announced a complaint against Altria and Juul challenging Altria’s minority investment in the company.

The FTC on April 1 filed a lawsuit to undo Altria's $12.8 billion investment in Juul, citing violations of federal antitrust laws.

Shares of Altria were down 2% at $39.74 in trading on Thursday.