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Altria (MO) Down 0.1% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Altria (MO - Free Report) . Shares have lost about 0.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Altria due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Altria's Q2 Earnings Meet Estimates, Revenues Down Y/Y
Altria Group delivered second-quarter 2023 results. Adjusted earnings came in at $1.31 per share, which jumped 4% year over year and matched the Zacks Consensus Estimate. The year-over-year increase was backed by the reduced number of shares outstanding, partly negated by a decline in the net periodic benefit income.
Net revenues fell 0.5% year over year to $6,508 million, mainly due to reduced net revenues in the smokeable product unit. After deducting excise taxes, revenues were up 1.2% to $5,438 million. The Zacks Consensus Estimate for revenues was pegged at $5,447 million.
Segment Information
Smokeable Products: Net revenues in the category decreased 0.9% year over year to $5,820 million due to the reduced shipment volume and increased promotional investments, partly compensated by greater pricing. Revenues, net of excise taxes, climbed 0.9%. Domestic cigarette shipment volumes tumbled 8.7%, mainly due to the industry’s decline rate and retail share losses, partly countered by trade inventory movements. The industry’s decline and retail share losses were a result of macroeconomic pressure on ATC’s disposable income.
On adjusting for trade inventory movements and other factors, the total estimated domestic cigarette industry volume fell an estimated 7.5%. Altria’s reported cigar shipment volumes rose 7.6%.
Oral Tobacco Products: Net revenues in the segment rose 2.3% from the year-ago quarter’s level to $680 million. The upside can be attributed to improved pricing, partly negated by the increased percentage of on! shipment volumes relative to MST (compared with the year-ago period), reduced shipment volumes and elevated promotional investments. Revenues, net of excise taxes, grew 2.8%.
Domestic shipment volumes fell 1.7%, mainly due to retail share losses. This was somewhat offset by the industry’s growth rate, calendar differences and trade inventory movements. On adjusting for calendar differences and trade inventory movements, the oral tobacco product segment’s shipment volume declined by an estimated 2.5%.
Guidance
Altria reiterated its guidance for 2023. The company envisions the adjusted EPS in the range of $4.89-$5.03, suggesting growth of 1-4% from the $4.84 recorded in 2022. As the external landscape remains dynamic, Altria continues assessing economic factors like elevated inflation, higher interest rates, global supply-chain hurdles and ATC dynamics, such as purchasing patterns, the adoption of smoke-free products and disposable income.
The bottom-line view also considers planned investments associated with costs to improve the digital consumer engagement system, and enhanced smoke-free product research, development and marketplace activities to support the company’s smoke-free products.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
Currently, Altria has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, Altria has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Altria (MO) Down 0.1% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Altria (MO - Free Report) . Shares have lost about 0.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Altria due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Altria's Q2 Earnings Meet Estimates, Revenues Down Y/Y
Altria Group delivered second-quarter 2023 results. Adjusted earnings came in at $1.31 per share, which jumped 4% year over year and matched the Zacks Consensus Estimate. The year-over-year increase was backed by the reduced number of shares outstanding, partly negated by a decline in the net periodic benefit income.
Net revenues fell 0.5% year over year to $6,508 million, mainly due to reduced net revenues in the smokeable product unit. After deducting excise taxes, revenues were up 1.2% to $5,438 million. The Zacks Consensus Estimate for revenues was pegged at $5,447 million.
Segment Information
Smokeable Products: Net revenues in the category decreased 0.9% year over year to $5,820 million due to the reduced shipment volume and increased promotional investments, partly compensated by greater pricing. Revenues, net of excise taxes, climbed 0.9%. Domestic cigarette shipment volumes tumbled 8.7%, mainly due to the industry’s decline rate and retail share losses, partly countered by trade inventory movements. The industry’s decline and retail share losses were a result of macroeconomic pressure on ATC’s disposable income.
On adjusting for trade inventory movements and other factors, the total estimated domestic cigarette industry volume fell an estimated 7.5%. Altria’s reported cigar shipment volumes rose 7.6%.
Oral Tobacco Products: Net revenues in the segment rose 2.3% from the year-ago quarter’s level to $680 million. The upside can be attributed to improved pricing, partly negated by the increased percentage of on! shipment volumes relative to MST (compared with the year-ago period), reduced shipment volumes and elevated promotional investments. Revenues, net of excise taxes, grew 2.8%.
Domestic shipment volumes fell 1.7%, mainly due to retail share losses. This was somewhat offset by the industry’s growth rate, calendar differences and trade inventory movements. On adjusting for calendar differences and trade inventory movements, the oral tobacco product segment’s shipment volume declined by an estimated 2.5%.
Guidance
Altria reiterated its guidance for 2023. The company envisions the adjusted EPS in the range of $4.89-$5.03, suggesting growth of 1-4% from the $4.84 recorded in 2022. As the external landscape remains dynamic, Altria continues assessing economic factors like elevated inflation, higher interest rates, global supply-chain hurdles and ATC dynamics, such as purchasing patterns, the adoption of smoke-free products and disposable income.
The bottom-line view also considers planned investments associated with costs to improve the digital consumer engagement system, and enhanced smoke-free product research, development and marketplace activities to support the company’s smoke-free products.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
Currently, Altria has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, Altria has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.