Source: Altria Group.

Tobacco giant Altria Group (NYSE:MO) has wowed investors for decades with its strong share-price appreciation and plentiful dividend payments to shareholders. Yet even though the company has successfully fended off major threats to its existence throughout its history, Altria investors still worry about the rising tide of regulation and consumer-health attacks and their potential impact on the company and its stock. Altria executives, on the other hand, are confident that they can adapt and continue to succeed in growing their business over time. Let's take a look at some of the most interesting things those executives said during Altria's most recent conference call following the company's second-quarter earnings release.

"Our company's leading premium brands and the strength of our diverse business model continue to deliver value for shareholders." -- CEO Marty Barrington

Altria has always relied on its brand recognition, and its premium Marlboro brand continues to have enormous value both in the U.S. and abroad. In its most recent quarter, Marlboro captured a 44% share of the U.S. market, and former Altria subsidiary Philip Morris International (NYSE:PM) has seen similar market-share performance from Marlboro overseas. That strength played a big role in holding back competition.

Altria CEO Marty Barrington. Image source: Altria Group.

Yet Marlboro isn't the only premium brand driving positive results for Altria. In the smokeless tobacco realm, the combination of the well-known Skoal and Copenhagen brands gave Altria an even more commanding 51.1% market share. With a model that seeks out profits not just from cigarettes but from smokeless and innovative products like electronic cigarettes, Altria leaves no stone unturned in maximizing its opportunities.

"Nu Mark began the national expansion of MarkTen e-vapor products [and] achieved strong distribution in over 60,000 stores. These stores account for more than 780% of cigarette industry volume in the Western U.S. where MarkTen is distributed." -- Barrington

Altria was relatively late to respond to the rise in popularity of electronic cigarettes, letting Lorillard (UNKNOWN:LO.DL) and its blu eCigs brand capture a first-mover advantage. But Altria is wasting no time in trying to catch up, and the early success of its initiatives to boost consumer awareness of its MarkTen line of e-cigarettes has given the company positive momentum going forward.

Altria and MarkTen will still have to keep holding back competition in order to meet the goal of high market share. But in that light, the decision from Reynolds American (NYSE:RAI) to sell off the blu brand in its proposed merger with Lorillard is good news for Altria, and it could give the company a better chance of beating out Reynolds American's Vuse product and starting to build up the market share Altria will want.

Altria headquarters. Source: Altria.

"In the wine segment, operating company volume was up 12% in the second quarter." -- CFO Howard Willard

Many investors have no idea that Altria is involved in anything other than tobacco and related products. Yet Altria also is the parent company of Ste. Michelle Wine Estates, which includes popular brands like Columbia Crest and Chateau Ste. Michelle. With adjusted operating company income of just $118 million, Altria's wine segment isn't a huge portion of its overall business. But when you also take into account Altria's roughly 30% stake in beer manufacturer SABMiller, it's clear that the company recognizes the value of at least some diversification in its product mix. With trends favoring wine consumption, Altria could see the wine business grow more rapidly than the cigarette segment in the future.

"Since we put in the Marlboro architecture and in particular with the new platform of Marlboro Black, which has been quite successful, what you see is that Marlboro really has continued to perform very well." -- Barrington

One of the challenges that Altria faces is that as cigarette taxes go up, it becomes more difficult for many smokers to afford premium brands. Altria therefore has to focus on maximizing its marketing efforts to keep its customers loyal while also attracting smokers away from competing brands.

Source: Altria Group.

Even as other manufacturers have targeted the discount end of the market, Altria has realized that to maintain its margins, it has to focus on building up the perceived value of Marlboro and other key brands. If regulatory efforts ever threaten to devalue the brand -- perhaps by introducing plain packaging rather than continuing to allow distinctive logos and images -- then Altria could see Marlboro's popularity suffer.

"At Altria, we're the market leader today, we would be a market leader after any transaction that has been proposed. We are really focused on maintaining our market leadership." -- Barrington

Much has been made about Reynolds American's proposed merger with Lorillard and the impact it could have on the domestic tobacco industry. Yet Altria executives refused to comment on the deal, and they don't believe that any consolidation in tobacco will hurt their leadership position. Altria investors should be pleased to see that the company isn't panicking, even though it's increasingly evident that Altria will have to keep working hard to fend off its competition and remain the dominant leader in U.S. tobacco.

Altria Group's stock has continued to climb consistently in recent years, and despite long-term trends toward lower cigarette consumption, the tobacco giant has managed to use its brand dominance to maintain commanding market share in the industry. Even with large changes coming soon, Altria remains poised to keep leading the sector forward to new growth opportunities.