Altria Group Inc. (NYSE:MO) Q2 2019 Earnings Conference Call - Final Transcript
Jul 30, 2019 • 09:00 am ET
Good day, and welcome to the Altria Group 2019 Second Quarter Earnings Conference Call. Today's call is scheduled to last about one hour, including remarks by Altria's management and a question-and-answer session. [Operator Instructions] Representatives of the investment community and media on the call will be able to ask questions, following the conclusion of the prepared remarks.
I would now like to turn the call over to Ms. Paige Magness, Vice President of Investor Relations and Communications for Altria Client Services. Please go ahead, ma'am.
Good morning, and thank you for joining us. We're here this morning with Howard Willard, Altria's CEO and Billy Gifford, our CFO, to discuss Altria's 2019 second quarter and first half business results. Earlier today, we issued a press release providing these results. We're also including slides to accompany our remarks and all of this information is available on our website at altria.com and through the Altria Investor App.
During our call today, unless otherwise stated we're comparing results to the same period of 2018. Our remarks contain forward-looking and cautionary statements and projections of future results. Please review the forward-looking and cautionary statement section at the end of today's earnings release for various factors that could cause actual results to differ materially from our projections. Future dividend payments and share repurchases remain subject to the discretion of Altria's board.
Share repurchases depend on marketplace conditions and other factors. Altria reports its financial results in accordance with US Generally Accepted Accounting Principles. Today's call will contain various operating results on both a reported and adjusted basis. Adjusted results exclude special items that affect comparisons with reported results. Descriptions of these non-GAAP financial measures and reconciliations are included in today's earnings release and on our website at altria.com.
With that, I'll turn the call over to Howard.
Thanks, Paige and good morning everyone. Altria delivered excellent second quarter results, driven by the performance of our core tobacco businesses. We grew adjusted diluted earnings per share nearly 9% in the second quarter, with each of our core tobacco segments delivering double-digit adjusted operating company's income growth, expanding their already-impressive adjusted operating company's income margins and maintaining momentum on their leading premium brands.
The strong second quarter was a big step-up from the first. As the negative smokeable inventory impact in the first quarter reversed to a benefit in the second. The second quarter also saw the benefits of our cost reduction program ramp up and we expect these will continue to build through the year. In the second quarter, we made important progress further enhancing our business platform and non-combustible product offerings for adult tobacco consumers.
In April, FDA authorized PMI's IQOS product for US commercialization in the heated tobacco category. And in June, we signed an agreement to acquire 80% ownership of the companies that will globally commercialize on a leading product in the rapidly-growing oral nicotine pouch category.
We also saw an acceleration of consumer trends that we believe further validate the strategic actions that we've