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Altria (MO) Gears Up for Q4 Earnings: Key Factors to Note

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Altria Group, Inc. (MO - Free Report) is likely to witness a year-over-year rise in the top and the bottom line when it reports fourth-quarter 2021 earnings on Jan 27. The Zacks Consensus Estimate for revenues is pegged at $5,070 million, suggesting a rise of 0.3% from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for earnings has increased by a penny over the past seven days to $4.62 per share, indicating a 10.1% jump from the figure reported in the prior-year period. The tobacco products giant has a trailing four-quarter earnings surprise of 0.7%, on average. Altria delivered a negative earnings surprise of 3.2% in the last reported quarter.

Altria Group, Inc. Price, Consensus and EPS Surprise

Altria Group, Inc. Price, Consensus and EPS Surprise

Altria Group, Inc. price-consensus-eps-surprise-chart | Altria Group, Inc. Quote

Key Factors to Consider

The company has been benefiting from its solid pricing power, which has been aiding its adjusted operating companies income (OCI) for a while now. Though higher pricing might lead to a possible decline in cigarette consumption, smokers tend to absorb price increases due to the addictive quality of cigarettes.  During the third quarter of 2021, higher pricing supported revenues across the Smokeable, Oral Tobacco and Wine categories. Moreover, higher pricing aided OCI across all segments. Continuation of such trends bodes well for the upcoming quarter.

Moving on, the company has been gaining on its focus on expanding in the reduced risk products or oral tobacco products space.  MO (through its subsidiary, Helix Innovations) has the full global ownership of on!, a popular tobacco-derived nicotine (TDN) pouch product. Management believes that on! is a worthwhile addition to Altria’s smokeless portfolio as oral TDN products are gaining popularity in the United States due to their low-risk claims.  As of Sep 30, 2021, Helix expanded its U.S distribution of on! to 110,000 stores.  Apart from this, Altria’s efforts to expand in the cannabis industry are an upside.

That being said, cigarette shipment volumes are being affected by anti-tobacco campaigns and increased consumer awareness regarding the harmful impacts of tobacco consumption. Regulatory hurdles are also a vital factor limiting the marketing of cigarettes, thereby adversely impacting its sales volume.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Altria this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here.

Altria currently has a Zacks Rank #4 (Sell) and an Earnings ESP of +0.16%. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Companies Likely to Post a Beat

Mondelez International (MDLZ - Free Report) has an Earnings ESP of +1.75% and holds a Zacks Rank of 3. Mondelez is expected to register growth in the top and bottom lines when it reports fourth-quarter 2021 numbers. The Zacks Consensus Estimate for MDLZ’s quarterly revenues is pegged at $7,542 million, which suggests growth of 3.3% from the prior-year quarter’s reported figure. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Mondelez’s quarterly earnings has been unchanged in the past 30 days at 72 cents per share, suggesting 3.3% growth from the year-ago reported number. Mondelez has delivered an earnings beat of 3.3%, on average, in the trailing four quarters.

Hershey (HSY - Free Report) has an Earnings ESP of +0.90% and a Zacks Rank of 3. The company is expected to witness a rise in the top and bottom lines when it reports fourth-quarter 2021 numbers. The Zacks Consensus Estimate for Hershey’s quarterly revenues is pegged at nearly $2,258 million, which suggests a rise of 3.4% from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for Hershey’s quarterly earnings has gone up by a penny in the past seven days to $1.63 per share, suggesting 9.4% growth from the year-ago reported number. HSY has delivered an earnings beat of 4.4%, on average, in the trailing four quarters.

Service Corporation (SCI - Free Report) has an Earnings ESP of +17.39% and a Zacks Rank #3. Service Corporation is anticipated to register growth in the top line but a decline in the bottom line when it reports fourth-quarter 2021 results. The Zacks Consensus Estimate for quarterly revenues is pegged at $1,012 million, indicating a rise of 4.3% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Service Corporation’s bottom line has jumped 11.1% in the past seven days to $1.00 per share. The consensus estimate suggests a drop of 11.5% from the year-ago quarter’s reported figure. SCI has delivered an earnings beat of 45.6%, on average, in the trailing four quarters.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.