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Altria Group Inc. (MO - Free Report) delivered fourth-quarter 2022 results, with the bottom line rising year over year and meeting the Zacks Consensus Estimate. However, net revenues declined from the year-ago quarter’s level.
Quarter in Detail
Adjusted earnings came in at $1.18 per share, which increased 8.3% year over year and came in line with the Zacks Consensus Estimate of $1.18. The year-over-year increase was backed by the increased adjusted operating companies income (OCI), reduced number of shares outstanding and favorable interest cost.
Net revenues fell 2.3% year over year to $6,111 million, mainly due to reduced net revenues in the smokeable products unit. After deducting excise taxes, revenues were down 0.1% to $5,083 million. The Zacks Consensus Estimate for revenues was pegged at $5,164.2 million.
Altria Group, Inc. Price, Consensus and EPS Surprise
Smokeable Products: Net revenues in the category dipped 2.4% year over year to $5,456 million due to the reduced shipment volume, partly compensated by increased pricing and reduced promotional investments. Revenues, net of excise taxes, remained in line with the year-ago quarter’s levels.
Domestic cigarette shipment volume decreased 12.1%, mainly due to the industry’s decline rate, retail share losses and calendar differences. On adjusting for trade inventory movements, calendar differences and other factors, the total estimated domestic cigarette industry volume fell an estimated 9%. Altria’s reported cigar shipment volumes fell 3.8%.
Adjusted OCI in the segment increased 4% to $2,603 million, courtesy of higher pricing, reduced promotional investments and lower per-unit settlement charges. These were somewhat offset by reduced shipment volume and increased costs. Adjusted OCI margins grew 2.2 percentage points to 58.4%.
Oral Tobacco Products: Net revenues in the segment fell 4.7% from the year-ago quarter’s level to $632 million. The downside can be attributed to increased promotional investments and reduced shipment volume, among other reasons. These factors were somewhat offset by improved pricing. Revenues, net of excise taxes, fell 4%.
Domestic shipment volume fell 4.3%, mainly due to calendar differences, retail share losses and other factors. These were somewhat offset by the industry’s growth rate and trade inventory movements. On adjusting for calendar differences and trade inventory movements, the oral tobacco products segment shipment volume dipped an estimated 3.5%.
Adjusted OCI fell 5.1% to $370 million, mainly due to greater promotional investments in on!, reduced shipment volume and mix change, partly offset by increased pricing. Adjusted OCI margins contracted 0.7 percentage points to 61.3%.
Image Source: Zacks Investment Research
Financial Updates
Altria ended the quarter with cash and cash equivalents of $4,030 million, long-term debt of $25,124 million and a total stockholders’ deficit of $3,973 million.
The company concluded its previously authorized $3.5 billion share repurchase program. In the reported quarter, it bought back 8.3 million shares for $374 million. During 2022, the company repurchased 38.1 million shares worth $1.8 billion. The company authorized a new share repurchase program of $1 billion, which is likely to be completed by Dec 31, 2023.
In the fourth-quarter and full-year 2022, the company paid dividends of $1.7 billion and $6.6 billion, respectively. The company maintains a long-term dividend payout ratio goal of about 80% for adjusted earnings per share (EPS).
For 2023, the company expects capital expenditures in the $175-$225 million range.
Guidance
For 2023, the company envisions the adjusted EPS in the range of $4.98-$5.13, suggesting growth of 3-6% from the $4.84 recorded in 2022.
The company continues assessing external environmental factors like increased 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 also considers planned investments associated with costs to improve the digital consumer engagement system, enhanced smoke-free product research, development and regulatory preparation expenses and marketplace activities to support the company’s smoke-free products. The view also considers reduced expected net periodic benefit income.
Shares of this Zacks Rank #3 (Hold) company have gained 0.5% in the past three months compared with the industry’s growth of 7.6%.
Conagra, a consumer-packaged goods food company, currently sports a Zacks Rank #1 (Strong Buy). CAG has a trailing four-quarter earnings surprise of 8.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Conagra’s current fiscal-year sales and earnings suggests growth of 7.2% and 12.7%, respectively, from the corresponding year-ago reported figures.
Lamb Weston, which is a frozen potato product company, currently sports a Zacks Rank #1. LW has a trailing four-quarter earnings surprise of 52.6%, on average.
The Zacks Consensus Estimate for Lamb Weston’s current fiscal-year sales and EPS suggests an increase of 19.6% and 90.4%, respectively, from the year-ago reported number.
Post Holdings, which operates as a consumer-packaged goods company, currently sports a Zacks Rank #1. POST has a trailing four-quarter earnings surprise of 9.6%, on average.
The Zacks Consensus Estimate for Post Holdings’ current fiscal-year EPS suggests an increase of 70.8% from the year-ago reported number.
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Altria (MO) Q4 Earnings Meet Estimates, Revenues Decline Y/Y
Altria Group Inc. (MO - Free Report) delivered fourth-quarter 2022 results, with the bottom line rising year over year and meeting the Zacks Consensus Estimate. However, net revenues declined from the year-ago quarter’s level.
Quarter in Detail
Adjusted earnings came in at $1.18 per share, which increased 8.3% year over year and came in line with the Zacks Consensus Estimate of $1.18. The year-over-year increase was backed by the increased adjusted operating companies income (OCI), reduced number of shares outstanding and favorable interest cost.
Net revenues fell 2.3% year over year to $6,111 million, mainly due to reduced net revenues in the smokeable products unit. After deducting excise taxes, revenues were down 0.1% to $5,083 million. The Zacks Consensus Estimate for revenues was pegged at $5,164.2 million.
Altria Group, Inc. Price, Consensus and EPS Surprise
Altria Group, Inc. price-consensus-eps-surprise-chart | Altria Group, Inc. Quote
Segment Details
Smokeable Products: Net revenues in the category dipped 2.4% year over year to $5,456 million due to the reduced shipment volume, partly compensated by increased pricing and reduced promotional investments. Revenues, net of excise taxes, remained in line with the year-ago quarter’s levels.
Domestic cigarette shipment volume decreased 12.1%, mainly due to the industry’s decline rate, retail share losses and calendar differences. On adjusting for trade inventory movements, calendar differences and other factors, the total estimated domestic cigarette industry volume fell an estimated 9%. Altria’s reported cigar shipment volumes fell 3.8%.
Adjusted OCI in the segment increased 4% to $2,603 million, courtesy of higher pricing, reduced promotional investments and lower per-unit settlement charges. These were somewhat offset by reduced shipment volume and increased costs. Adjusted OCI margins grew 2.2 percentage points to 58.4%.
Oral Tobacco Products: Net revenues in the segment fell 4.7% from the year-ago quarter’s level to $632 million. The downside can be attributed to increased promotional investments and reduced shipment volume, among other reasons. These factors were somewhat offset by improved pricing. Revenues, net of excise taxes, fell 4%.
Domestic shipment volume fell 4.3%, mainly due to calendar differences, retail share losses and other factors. These were somewhat offset by the industry’s growth rate and trade inventory movements. On adjusting for calendar differences and trade inventory movements, the oral tobacco products segment shipment volume dipped an estimated 3.5%.
Adjusted OCI fell 5.1% to $370 million, mainly due to greater promotional investments in on!, reduced shipment volume and mix change, partly offset by increased pricing. Adjusted OCI margins contracted 0.7 percentage points to 61.3%.
Image Source: Zacks Investment Research
Financial Updates
Altria ended the quarter with cash and cash equivalents of $4,030 million, long-term debt of $25,124 million and a total stockholders’ deficit of $3,973 million.
The company concluded its previously authorized $3.5 billion share repurchase program. In the reported quarter, it bought back 8.3 million shares for $374 million. During 2022, the company repurchased 38.1 million shares worth $1.8 billion. The company authorized a new share repurchase program of $1 billion, which is likely to be completed by Dec 31, 2023.
In the fourth-quarter and full-year 2022, the company paid dividends of $1.7 billion and $6.6 billion, respectively. The company maintains a long-term dividend payout ratio goal of about 80% for adjusted earnings per share (EPS).
For 2023, the company expects capital expenditures in the $175-$225 million range.
Guidance
For 2023, the company envisions the adjusted EPS in the range of $4.98-$5.13, suggesting growth of 3-6% from the $4.84 recorded in 2022.
The company continues assessing external environmental factors like increased 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 also considers planned investments associated with costs to improve the digital consumer engagement system, enhanced smoke-free product research, development and regulatory preparation expenses and marketplace activities to support the company’s smoke-free products. The view also considers reduced expected net periodic benefit income.
Shares of this Zacks Rank #3 (Hold) company have gained 0.5% in the past three months compared with the industry’s growth of 7.6%.
Solid Food Picks
Some better-ranked food stocks are Conagra Brands (CAG - Free Report) , Lamb Weston (LW - Free Report) and Post Holdings (POST - Free Report) .
Conagra, a consumer-packaged goods food company, currently sports a Zacks Rank #1 (Strong Buy). CAG has a trailing four-quarter earnings surprise of 8.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Conagra’s current fiscal-year sales and earnings suggests growth of 7.2% and 12.7%, respectively, from the corresponding year-ago reported figures.
Lamb Weston, which is a frozen potato product company, currently sports a Zacks Rank #1. LW has a trailing four-quarter earnings surprise of 52.6%, on average.
The Zacks Consensus Estimate for Lamb Weston’s current fiscal-year sales and EPS suggests an increase of 19.6% and 90.4%, respectively, from the year-ago reported number.
Post Holdings, which operates as a consumer-packaged goods company, currently sports a Zacks Rank #1. POST has a trailing four-quarter earnings surprise of 9.6%, on average.
The Zacks Consensus Estimate for Post Holdings’ current fiscal-year EPS suggests an increase of 70.8% from the year-ago reported number.