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Altria Group Inc. is set to report fourth-quarter fiscal 2013 results on Jan 30. Last quarter, it delivered in-line results. Let us see how things are shaping up for this announcement.

Factors to Consider This Quarter

Altria has been reporting decent earnings results for the past few quarters backed by higher operating income and pricing power. Its impressive brand portfolio of tobacco and wine products helps it to maintain a strong business momentum and generate decent profit, which we believe will continue in the fourth quarter as well.

Moreover, Altria adapts itself to new consumer preference and tastes and is putting thrust on alternative tobacco products. During the fourth quarter Altria joined forces with Philip Morris International Inc. under which Philip Morris will market Altria’s MarkTen e-cigarettes internationally and the latter will distribute two of Philip Morris’ heated tobacco products in the United States.

The two companies will also work on gaining shares as well as improving existing versions for the products. Such collaboration is encouraging as it will help Altria maintain market share amidst declining volume  of tobacco products in the upcoming quarter.

However, anti-tobacco campaigns and awareness of people against the harmful effects of tobacco are leading to decline in volume and sales of the company. Moreover, e-cigarettes are now being considered by both the French and EU governments as tobacco products and they face same restrictions as normal tobacco products. These developments are expected to impact volume negatively for the tobacco companies.

Earnings Whispers?

Our proven model does not conclusively show that Altria is likely to beat earnings this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 to surpass earnings estimate. However, that is not the case here due to the following factors:

Zacks ESP: ESP for Altria is 0.00%.

Zacks Rank #2 (Buy): Altria’s Zacks Rank when combined with a 0.00% ESP makes surprise prediction difficult.

We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Lorillard Inc. , with Earnings ESP of +1.18% and a Zacks Rank #2 (Buy).

Michael Kors Inc. , with Earnings ESP of +1.15% and a Zacks Rank #2.

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