AI Takeaway
Altria Group (MO) delivered a strong Q1 2026 with net income more than doubling to $2.18B (+102.7% YoY) and EPS of $1.30, driven by significant margin expansion, though the company carries negative stockholders' equity and substantial long-term debt of $24.6B.
Revenue
$5.43B
++3.21% YoY
EPS (Basic)
$1.30
++106.35% YoY
Gross Margin
64.6%
++2.81% YoY
Operating Income
$2.96B
++65.32% YoY
Filed · Source: SEC EDGAR 10-Q filing
Total revenue increased 3.2% YoY to $5.43B in Q1 2026 (from $5.26B), while cost of revenue actually declined 1.4% YoY to $1.25B, suggesting effective pricing strategies and cost discipline in the core tobacco business.
Source: Source: 10-Q Income Statement
Operating income surged 65.3% YoY to $2.96B, pushing the operating margin from approximately 34.0% to 54.5% — a 20.5 percentage point improvement — indicating significant reduction in operating expenses or one-time gains in the period.
Source: Source: 10-Q Income Statement
Net income reached $2.18B in Q1 2026 versus $1.08B in Q1 2025, a 102.7% increase, with net margin expanding to 40.2%, reflecting both improved operating performance and potentially favorable below-the-line items such as investment gains or reduced interest expense.
Source: Source: 10-Q Income Statement & Balance Sheet
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Upgrade to unlockAltria carries negative stockholders' equity of -$3.21B and long-term debt of $24.6B, resulting in a debt-to-equity ratio of approximately -11.75x. This highly leveraged balance sheet limits financial flexibility and increases vulnerability to rising interest rates or any deterioration in operating cash flows.
Source: Source: 10-Q Balance Sheet
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Upgrade to unlockReported EPS of $1.32 versus the $1.28 analyst consensus — a +2.8% beat for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $5.43B | $5.26B | +3.21% |
Cost of Revenue | $1.25B | $1.27B | -1.42% |
Gross Profit | $3.51B | $3.25B | +7.91% |
Operating Income | $2.96B | $1.79B | +65.32% |
Net Income | $2.18B | $1.08B | +102.69% |
EPS (Basic) | $1.30 | $0.63 | +106.35% |
EPS (Diluted) | $1.30 | $0.63 | +106.35% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $34.58B | $35.76B | -3.29% |
Current Assets | $5.2B | $6.08B | -14.44% |
Total Liabilities | $37.74B | $39.22B | -3.76% |
Current Liabilities | $8.41B | $10.65B | -21.10% |
Stockholders' Equity | $-3.21B | $-3.51B | +8.52% |
Cash & Equivalents | $3.53B | $4.73B | -25.29% |
Long-Term Debt | $24.6B | $26.06B | -5.59% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $2.32B | $2.72B | -14.56% |
Investing Cash Flow | $-109M | $-43M | -153.49% |
Financing Cash Flow | $-3.16B | $-1.08B | -190.97% |
Share Buybacks | $280M | $326M | -14.11% |
D&A | $56M | $71M | -21.13% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 64.6% | 61.8% | +2.81% |
Operating Margin | 54.5% | 34.0% | +20.46% |
Net Margin | 40.2% | — | — |
ROE | -68.0% | — | — |
ROA | 6.3% | — | — |
Current Ratio | $0.619 | — | — |
Debt to Equity | $-11.755 | — | — |
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Altria delivered a very strong Q1 2026, with net income more than doubling to $2.18B (+102.7% YoY) and EPS reaching $1.30 versus $0.63 a year ago. Revenue grew a modest 3.2% to $5.43B, but dramatic margin expansion — operating margin hit 54.5% — drove the outsized profit growth.
The standout takeaway is the massive improvement in profitability: operating income jumped 65.3% to $2.96B and net income doubled to $2.18B despite only modest revenue growth of 3.2%. However, operating cash flow declined 14.6% to $2.32B and the company's current ratio of 0.62x highlights near-term liquidity considerations.
Altria's profitability metrics are strong with a 40.2% net margin and 64.6% gross margin, but its balance sheet carries significant risk: negative stockholders' equity of -$3.21B, $24.6B in long-term debt, and a current ratio of just 0.62x. The company is deleveraging — total liabilities fell 3.8% YoY — but remains highly leveraged.
Altria repurchased $280M in shares during Q1 2026, down 14.1% from $326M in Q1 2025. Total financing cash outflows surged to -$3.16B (from -$1.09B a year ago), which likely includes substantial dividend payments consistent with Altria's historically high dividend yield.
Altria's operating margin expanded dramatically from 34.0% to 54.5% YoY — a 20.5 percentage point jump — driven by a combination of 3.2% revenue growth and a significant reduction in operating costs, with cost of revenue actually falling 1.4% YoY. This suggests either reduced charges compared to Q1 2025 or meaningful operational improvements in the business.