Altria Group (MO -0.12%) reported its cigarette business has held up spectacularly during the COVID-19 pandemic, with fourth-quarter sales rising 5% to $6.3 billion and handily beating analyst expectations.

But the tobacco giant's investments in electronic cigarette maker Juul Labs and marijuana producer Cronos Group (CRON -2.88%) continue to weigh on performance, and adjusted earnings of $0.99 per share fell short of Wall Street's forecast of $1.02 per share.

The board of directors also announced a new $2 billion stock buyback program that it expects to complete by July.

$100 bills under a magnifying glass and stock chart

Image source: Getty Images.

Still a cloudy future

Altria CEO Billy Gifford said, "Our tobacco businesses were resilient and we made steady progress toward our 10-year vision to responsibly transition adult smokers to a noncombustible future."

It's a nice sentiment, but the noncombustible portion of its portfolio really went nowhere. Philip Morris International's (PM -0.14%) IQOS heated tobacco device, for example, is still in only three markets despite having gotten regulatory approval to sell the e-cig in the U.S. almost two years ago. 

It's possible Altria was waiting for the Food & Drug Administration to sign off on the third-generation IQOS device, which it did in December, before launching a nationwide rollout, but with other e-cig makers awaiting their own approvals, Altria is losing its first-mover advantage.

The Juul debacle is still ongoing as well, and though the device still owns over half the market, the fair value of its investment swiped a nickel from earnings per share according to generally accepted accounting principles (GAAP), while the Cronos investment cost Altria another $0.04 in EPS. 

Altria provided full-year guidance and foresees earnings growth of 3% to 6%, or $4.49 to $4.62 per share. The tobacco giant's dividend of $3.44 per share currently yields 8.2% annually. It maintains a long-term dividend payout ratio target of approximately 80% of adjusted EPS.