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Altria’s Revenue 2022, Breakdown And Projected Growth Rates

One of Altria’s brand names: Marlboro. Source: Flickr

It would be an understatement to say that Altria (NYSE:MO) is a cigarette company.

For years, Altria has been diversifying into different areas, including cannabis, while still aggressively strengthening its core tobacco businesses.

As of 4Q 2021, Altria holds several businesses that are made up of the following subsidiaries:

  • Philip Morris USA – the maker of Marlboro cigarettes
  • U.S. Smokeless Tobacco Company – the maker of Copenhagen and Skoal
  • John Middleton – the maker of Black & Mild cigars
  • Helix Innovations – the maker of on! oral nicotine pouches

Aside from the business holdings above, Altria also has strategic investments and agreements with other companies, including:

  • 35% economic interest in JUUL Labs – U.S. leading e-vapor company
  • 10.1% ownership in Anheuser-Busch InBev – the world’s largest brewer
  • 45% ownership in Cronos Group – a leading global cannabinoid company
  • Exclusive U.S. license to commercialize Philip Morris International’s IQOS product – the only heated tobacco product authorized by the US FDA

With a portfolio of businesses and investments that span across the tobacco, cannabis and smokeless products, Altria is determined to transition from, perhaps, a cigarette player into a conglomerate of multiple businesses.

In this article, we will look at Altria’s several revenue-related metrics, including the total revenue, revenue net of excise taxes, revenue growth, projected and estimated revenue for fiscal 2022, as well as the revenue breakdown by segment and by product category.

Without any hesitation, let’s start with the following topics!

Altria’s Net Revenue (Yearly)

Altria's annual revenue

Altria’s annual revenue

* Annual net revenue is a GAAP measure and is obtained from Altria’s income statements.
* Annual net revenue shown is revenue net of excise taxes.
* Projected revenue for 2022 is calculated by the author based on the guidance provided by Altria.
* Altria’s fiscal year begins on Jan 1 and ends on Dec 31.

Let’s first look at Altria’s net revenue on an annual basis as shown in the chart above for the period from fiscal 2016 to 2022.

Fiscal 2022 revenues net of excise taxes are projected and estimated figures calculated by the author based on the guided EPS provided by Altria.

For your information, the net revenue shown is the revenue net of excise taxes consolidated at the company level to exclude the effect of excise taxes.

In fiscal 2021, Altria’s net revenue came in at $21 billion USD, a rise of about 1.3% from fiscal 2020.

Of all the fiscal years, Altria’s net revenue grew the most in 2020, by more than $1 billion to $20.8 billion, up 5% from fiscal 2019.

Going into fiscal 2022, Altria’s revenue is estimated to come in at $22.2 billion, representing a year-on-year growth rate of about 5%.

This figure is calculated based on Altria’s guidance of between $4.79 and $4.93 USD in adjusted EPS for fiscal 2022.

These figures represent a year-over-year growth rate of about 5% from 2021 on average.

Using a 40% net earnings margin and a growth rate of about 4% for Altria’s adjusted net earnings, the net revenue net of excise taxes for fiscal 2022 is projected to reach $22.2 billion USD.

Altria’s Net Revenue Breakdown By Segment (Yearly)

Altria revenue breakdown by segment (yearly)

Altria revenue breakdown by segment (yearly)

* Annual net revenue by segment is a GAAP measure and is obtained from Altria’s earnings presentation.
* Annual net revenue by segment shown in the chart is net of excise taxes.
* Altria’s fiscal year begins on Jan 1 and ends on Dec 31.

Next, we look at Altria’s annual net revenue by product segment.

As shown, Altria’s product segments can be divided into 3 categories, and they are smokeable products, oral tobacco products and wine.

Accordingly, Altria’s smokeable product or the combustible segment has been the company’s main revenue stream, earning roughly $16 billion per annum.

The 2nd largest revenue contributor goes to Altria’s oral tobacco or the non-combustible segment, at about $2 billion per annum.

The smallest is Altria’s wine category which earns about $600 million per annum.

Between fiscal 2016 and 2021, Altria has been able to grow its smokeable and oral tobacco revenues by a reasonable growth rate.

In contrast, Altria’s wine revenue has decreased significantly over the same period between 2016 and 2021.

In fiscal 2021, Altria earned $18 billion and $2.5 billion of net revenue in smokeable product and oral tobacco product segments, respectively.

Altria’s wine revenue came in at only $480 million in fiscal 2021, the least among all product categories.

Altria’s Net Revenue Growth Rates (Year Over Year)

Altria total revenue and revenue by product growth rates (year over year)

Altria total revenue and revenue by product growth rates (year over year)

* Year over year growth rates are calculated by the author based on Altria’s annual revenue net of excise taxes and revenue by product categories net of excise taxes.
* Altria’s fiscal year begins on Jan 1 and ends on Dec 31.

Based on the chart above, Altria’s total revenue grew the most in 2020 at 5.3% year over year, indicating that the company’s total sales were largely unaffected by the COVID-19 pandemic.

Altria’s total revenue growth moderated in fiscal 2021, clocking in at only 1.3%.

Similarly, Altria’s combustible product segment revenue growth also moderated in fiscal 2021 to only 1% compared to 6.5% reported in fiscal 2020.

Altria’s oral tobacco or non-combustible product revenue growth was 7.3% in fiscal 2020, the best year in the record but the figure declined to only 3% in fiscal 2021.

On the other hand, Altria’s wine sector revenue growth was negative in fiscal 2020 and 2021, clocking in at -11% and -19%, respectively.

Altria’s Net Revenue (Quarterly)

Altria's quarterly revenue

Altria’s quarterly revenue

* Quarterly net revenue is a GAAP measure and is obtained from Altria’s income statements.
* Quarterly net revenue shown in the chart are comprised of both revenue before excise taxes and revenue net of excise taxes.
* Altria’s fiscal year begins on Jan 1 and ends on Dec 31.

From a quarterly perspective, Altria’s total revenue has been mostly flat between 2017 and 2021, averaging around $6.4 billion and $5 billion for net revenues and revenues net of excise taxes, respectively.

In 2021 Q4, Altria earned a quarterly net revenue and revenue net of excise taxes of $6.3 billion and $5.1 billion, respectively.

Despite the COVID-19 headwinds, Altria continued to execute efficiently and managed to maintain roughly the same revenue for net revenue and revenue net of excise taxes, respectively, in the 4th quarter.

In short, Altria has been able to emerge from the COVID-19 pandemic relatively unscathed.

Altria’s Net Revenue (TTM)

Altria's TTM revenue

Altria’s TTM revenue

* TTM net revenue is a GAAP measure and is computed using the quarterly data obtained from Altria’s income statements.
* TTM net revenue consists of the sum of the quarterly data on a trailing 12-month or 4-quarter basis.
* TTM net revenue shown in the chart are comprised of both revenue before excise taxes and revenue net of excise taxes.
* Altria’s fiscal year begins on Jan 1 and ends on Dec 31.

The trailing 12-month or TTM plot is best used to check on the long-term trend of Altria’s net revenues.

From a TTM perspective, Altria’s net revenue and revenue net of excise taxes continued to scale to new highs.

As of 2021 Q4, Altria’s net revenue and revenue net of excise taxes reached record highs at $26 billion and $21.1 billion, respectively.

Again, despite the negative impact of the COVID-19 on most businesses, Altria seems to be able to defy the pandemic disruption and even thrive in the age of COVID and the post-pandemic period.

Altria’s Revenue Breakdown By Percentage

Altria's quarterly revenue by segment

Altria’s quarterly revenue by segment

* TTM net revenue breakdown by product segment is computed by the author using quarterly revenue before excise taxes obtained from Altria’s income statements.
* TTM data consists of the sum of the quarterly data on a trailing 12-month or 4-quarter basis.
* Altria’s fiscal year begins on Jan 1 and ends on Dec 31.

As seen in the prior discussion, Altria’s revenue segments are broken down into 3 reportable units as shown in the chart above.

The revenue breakdown consists of (1) smokeable products, (2)oral tobacco products and, (3) wine products, expressed in percentage on a quarterly basis.

Accordingly, Altria’s smokeable product has been the largest revenue generator, contributing close to 90% of the company’s total sales.

Altria’s smokeable product revenue proportion has been relatively unchanged over the last 5 years.

In contrast, Altria’s oral tobacco product revenue percentage has reached a record high of 10% as of 4Q 2021, compared to 8.4% 5 years ago.

Altria’s wine product revenue percentage has decreased to only 1.9% of the company’s total sales as of Q4 2021.

It looks like Altria is still pretty much a cigarette and cigar company, considering that its combustible product segment still makes up close to 90% of the company’s total revenue.

Lastly, Altria’s non-tobacco business such as the wine segment has actually performed worse in the last 5 years.

For your information, Altria has completely exited the wine business as of Q4 2021 by selling off the subsidiary.

Here is a quote extracted from Altria’s 4Q 2021 earnings release:

Altria Wine Product
On October 1, 2021, UST LLC sold its subsidiary, International Wine & Spirits Ltd., which included Ste. Michelle, to Sycamore Partners Management, L.P.

Therefore, Altria still has much work to do to transform itself to rely less on combustible products.

Altria’s Smokable Products Revenue (Quarterly)

Altria's quarterly smokeable products revenue

Altria’s quarterly smokeable products revenue

* Quarterly smokeable product revenue is a GAAP measure and is obtained from Altria’s income statements.
* Quarterly smokeable product revenue shown in the chart is comprised of both revenue before excise taxes and revenue net of excise taxes.
* Altria’s fiscal year begins on Jan 1 and ends on Dec 31.

Altria’s smokable products consist of mainly combustible cigarettes manufactured and sold by Philips Moris USA and Nat Sherman.

Other than cigarettes, Altria also earns a part of its revenue from cigars manufactured and sold under Middleton and Nat Sherman.

As shown in the chart above, Altria’s smokable product revenue remained relatively flat over the last 5 years.

Similarly, Altria’s smokeable product revenue came in at $5.6 billion and $4.5 billion, respectively, in fiscal 2021 4Q for sales before excise taxes and sales net of excise taxes.

Altria’s Smokable Products Revenue (TTM)

Altria's TTM smokeable products revenue

Altria’s TTM smokeable products revenue

* TTM smokeable product revenue is computed by the author using quarterly revenue obtained from Altria’s earnings releases.
* TTM data consists of the sum of the quarterly data on a trailing 12-month or 4-quarter basis.
* Altria’s fiscal year begins on Jan 1 and ends on Dec 31.

The quarterly revenue plot for smokable products may not clearly indicate the trend.

Therefore, we look at the trailing 12-month or TTM plot above to uncover the most obvious trend.

As shown in the chart, Altria’s smokable product revenue has actually trended upward between 2017 and 2021, reaching $22.9 billion and $18.1 billion for net revenue and revenue net of excise taxes, respectively, in 4Q 2021.

Particularly, the uptrend of Altria’s TTM smokeable product revenue is clearly seen in 2021.

In fact, Altria’s TTM smokable products revenue reached multiple new highs from 2020 to 2021, illustrating the resilience of the combustible product category during the age of the COVID-19 and in a post-pandemic world.

After all, people do smoke more cigarettes and cigars when facing a distressed environment.

Altria’s Oral Tobacco Products Revenue (Quarterly)

Altria's quarterly oral tobacco products revenue

Altria’s quarterly oral tobacco products revenue

* Quarterly oral tobacco product revenue is a GAAP measure and is obtained from Altria’s income statements.
* Quarterly oral tobacco product revenue shown in the chart is comprised of both revenue before excise taxes and revenue net of excise taxes.
* Altria’s fiscal year begins on Jan 1 and ends on Dec 31.

The oral tobacco product segment earned revenue from the sale of Copenhagen and Skoal as well as the On! oral nicotine pouches.

According to the chart, the uptrend is even more obvious for revenue generated from the sales of oral tobacco products.

Both net revenue and revenue net of excise taxes for oral tobacco products reached multiple new highs from 2020 to 2021.

As of 2021 Q4, Altria’s quarterly non-combustible product revenues reached $663 million and $629 million, respectively, for net revenue and revenue net of excise taxes.

Altria attributed the growth of revenue in the smokeless category in 2021 to higher pricing and higher shipment volume.

Altria’s Oral Tobacco Products Revenue (TTM)

Altria's TTM oral tobacco products revenue

Altria’s TTM oral tobacco products revenue

* TTM oral tobacco product revenue is computed by the author using quarterly revenue obtained from Altria’s earnings releases.
* TTM data consists of the sum of the quarterly data on a trailing 12-month or 4-quarter basis.
* Altria’s fiscal year begins on Jan 1 and ends on Dec 31.

The TTM plots above explain everything that you need to know and that is growth!

Altria’s TTM revenues in the smokeless product category have persistently trended upward in almost every single quarter in the last 5 years.

As of Q4 2021, Altria’s oral tobacco products revenue reached $2.6 billion and $2.5 billion on a TTM basis for net revenue and revenue net of excise taxes, respectively, representing a YoY growth rate of at least 3%.

Altria’s Wine Products Revenue (Quarterly)

Altria's quarterly wine products revenue

Altria’s quarterly wine products revenue

* Quarterly wine revenue is a GAAP measure and is obtained from Altria’s income statements.
* Quarterly wine revenue shown in the chart is comprised of both revenue before excise taxes and revenue net of excise taxes.
* Altria’s fiscal year begins on Jan 1 and ends on Dec 31.

In terms of wine product revenue, this segment of revenue has gone the opposite and declined substantially over the last 5 years.

In 2021 4Q, Altria’s revenue from wine products has gone to zero for net revenue and revenue net of excise taxes, respectively, as Altria sold its wine subsidiary on Oct 1, 2021.

The sale has been driven primarily by the poor result of the wine product category.

Altria’s wine product segment was hit particularly hard during the pandemic and even in a post-pandemic period.

According to Altria, Ste. Michelle wine estates have been negatively impacted by the stay-at-home order due mainly to the COVID-19 pandemic, including lower on-premise and direct-to-consumer sales.

As a result, Altria’s wine revenue year-over-year growth has continued to decline between 2020 and 2021.

Altria’s Wine Products Revenue (TTM)

Altria's TTM wine products revenue

Altria’s TTM wine products revenue

* TTM wine revenue is computed by the author using quarterly revenue obtained from Altria’s earnings releases.
* TTM data consists of the sum of the quarterly data on a trailing 12-month or 4-quarter basis.
* Altria’s fiscal year begins on Jan 1 and ends on Dec 31.

On a TTM basis, Altria’s wine sales, both net revenue and revenue net of excise taxes, have gone to an all-time low at only $494 million and $480million, respectively, as of 4Q 2021.

In particular, from a TTM perspective, Altria’s wine sales declined the most in 2020 and recovered slightly in 2021.

Over the chart, Altria’s wine sales decline accelerated in 2020, driven largely by the stay-at-home order that has been put in place throughout the pandemic.

By fiscal 2021 Q4, Altria’s wine product does not exist anymore as the company has already sold off the subsidiary.

Conclusion

In summary, Altria’s total revenue surged to an all-time high in 2020 at more than $20 billion, indicating that the company was largely unaffected by the COVID-19 outbreak.

In fiscal 2021, Altria’s annual revenue net of excise taxes grew 1.3% to $21.1 billion.

On a guided basis, Altria expects to rake in $22.2 billion in revenue net of excise taxes for fiscal 2022 based on the adjusted EPS of $4.86 USD.

In terms of revenue breakdown, both smokable and oral tobacco business units have reported an increase in sales, particularly in the oral tobacco product category.

In contrast, Altria’s wine segment has been significantly impacted by the COVID-19, with sales down by more than 10% year on year in 2020.

Therefore, Altria sold the wine business in 2021 and the sale was completed in 4Q 2021.

As of fiscal 2021, Altria’s majority of sales still came mainly from cigarettes and cigars, and they made up close to 90% of the company’s total sales in 2021.

In short, Altria is still a cigarettes and cigars company as of 2021 Q4.

References and Credits

1. All financial figures in this article were obtained and referenced from Altria’s annual and quarterly reports which are available in Altria Investors Relation.

2. Featured images in this article are used under creative commons license and sourced from the following websites: Thomas Hawk and g0dd4mn[LZW].

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Disclosure

The content in this article is for informational purposes only and is neither a recommendation nor a piece of financial advice to purchase a stock.

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