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SEC filingAltria delivered strong financial results for Q1 FY2026, with revenue, gross profit, operating income, and net income all increasing year-over-year — driven by pricing actions and tax/duty refunds — even as domestic cigarette shipment volume declined.
Operating company income (OCI) increased significantly year-over-year, reflecting the impact of higher pricing — which includes higher promotional investments — and 2026 refunds of taxes and duties paid on imported cigarettes. These positive factors were partially offset by lower volume/product mix and higher manufacturing costs. Management reviews OCI on both a reported and adjusted basis, excluding certain items not considered part of underlying operations.
Revenue for Q1 FY2026 was $5.4 billion, an increase of 3.2% compared to $5.3 billion in Q1 FY2025. Gross profit rose 7.9% to $3.5 billion, yielding a gross margin of 64.6%. This margin reflects the net effect of pricing actions and cost dynamics across the business.
Net income totaled $2.2 billion for Q1 FY2026, more than doubling from $1.1 billion in Q1 FY2025. Diluted earnings per share were $1.30, up 106.3% from $0.63 in the prior-year quarter. The substantial growth in net income was driven by higher operating income and reflects the same underlying drivers — pricing, tax/duty refunds, and cost management — that influenced OCI.
Net cash provided by operating activities was $2.3 billion in Q1 FY2026, compared to $2.7 billion in Q1 FY2025. Capital expenditures were $93 million, up from $38 million in the prior-year quarter. Free cash flow — defined as net cash provided by operating activities less capital expenditures — was $2.2 billion. This level of free cash flow supports Altria’s ongoing commitment to returning capital to shareholders through dividends and share repurchases, though specific amounts for such returns are not quantified in the authoritative financial packet.