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Altria's (MO) Q4 Earnings Top Estimates, Revenues Decline Y/Y
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Altria Group Inc. (MO - Free Report) delivered fourth-quarter 2023 results, wherein the bottom line came ahead of the Zacks Consensus Estimate while remaining flat year over year. Though the company benefited from pricing power, soft cigarette shipment volumes continued hurting revenues.
On Jun 1, 2023, Altria concluded the buyout of NJOY Holdings Inc., which is contributing to the company’s performance.
Quarter in Detail
Adjusted earnings came in at $1.18 per share, which remained flat year over year and came a penny ahead of the Zacks Consensus Estimate of $1.17. The reduced number of shares outstanding and the lower tax rate were negated by a decline in adjusted operating companies income (OCI).
Altria Group, Inc. Price, Consensus and EPS Surprise
Net revenues fell 2.2% year over year to $5,975 million, mainly due to reduced net revenues in the smokeable product unit. After deducting excise taxes, revenues were down 1.2% to $5,024 million. The Zacks Consensus Estimate for revenues was pegged at $5,085 million.
Segment Details
Smokeable Products: Net revenues in the category decreased 3.3% year over year to $5,274 million due to the reduced shipment volume and increased promotional investments, partly compensated by greater pricing. Revenues, net of excise taxes, fell 2.4%. The consensus mark for the segment’s revenues was pegged at $5,296 million for the quarter under review.
Domestic cigarette shipment volumes tumbled 7.6%, mainly due to the industry’s decline rate and retail share losses, partly compensated by trade inventory movements. The industry’s decline was a result of macroeconomic pressure on Adult Tobacco Consumers’ (“ATC”) disposable income and increases in illegitimate e-vapor products. Altria’s reported cigar shipment volumes decreased 1.4%.
Adjusted OCI in the segment declined 1.3% to $2,568 million, with higher pricing and reduced costs being more than offset by reduced shipment volumes, elevated promotional investments and increased per-unit settlement charges. However, adjusted OCI margins grew 0.6 percentage points to 59%.
Oral Tobacco Products: Net revenues in the segment rose 6.6% from the year-ago quarter’s level to $674 million. The upside can be attributed to improved pricing and reduced promotional investments, partly negated by the increased percentage of on! shipment volumes relative to MST and reduced MST shipment volumes. Revenues, net of excise taxes, grew 7.1%. The Zacks Consensus Estimate for the segment’s revenues stood at $687 million for the fourth quarter.
Domestic shipment volumes fell 2%, mainly due to retail share losses in MST. This was somewhat offset by the industry’s growth rate and other aspects.
Adjusted OCI rose 10.3% to $408 million, mainly due to increased pricing and a decline in promotional investments, somewhat negated by elevated costs, the changed mix and reduced MST shipment volumes. Adjusted OCI margins climbed 1.8 percentage points to 63.1%.
Other Updates
Altria ended the quarter with cash and cash equivalents of $3,686 million, long-term debt of $25,112 million and a total stockholders’ deficit of $3,540 million.
MO repurchased 22.7 million shares for $1 billion during the full year 2023, thereby concluding its previous buyback program. Management unveiled a new repurchase program worth $1 billion, which is anticipated to be concluded by Dec 31, 2024.
During the fourth quarter, the company paid out dividends of $1.7 billion. In 2023, it paid out dividends worth $6.8 billion.
Guidance
Altria’s results reflect its resilience amid a tough macroeconomic landscape, with ATC spending patterns being affected by overall inflation.
For 2024, the company envisions the adjusted EPS in the range of $5.00-$5.15, indicating growth of 1-4% from the $4.95 recorded in 2023. Management expects the bottom-line growth to be skewed toward the second half of 2024. The guidance includes the impact of two extra shipping days in 2024.
As the external landscape remains dynamic, MO continues assessing economic factors like inflation, ATC dynamics (such as purchasing patterns and the adoption of smoke-free products), illegal e-vapor enforcement and regulatory developments.
The bottom-line view also considers planned investments associated with enhanced smoke-free product research, development and marketplace activities to support MO’s smoke-free products.
Shares of this Zacks Rank #4 (Sell) company have dropped 10.4% in the past six months compared with the industry’s decline of 8.5%.
The Zacks Consensus Estimate for Lamb Weston’s current fiscal-year sales and earnings per share (EPS) suggests growth of 28.3% and 26.9%, respectively, from the year-ago reported numbers.
Sysco Corporation (SYY - Free Report) , a company engaged in the marketing and distribution of various food and related products, currently carries a Zacks Rank #2. SYY has a trailing four-quarter earnings surprise of 1.2%, on average.
The Zacks Consensus Estimate for Sysco’s current fiscal-year sales and EPS suggests growth of 4.3% and 8.2%, respectively, from the corresponding year-ago reported figures.
TreeHouse Foods (THS - Free Report) , a private-label food and beverage company, currently carries a Zacks Rank #2. THS has a trailing four-quarter earnings surprise of 26.5%, on average.
The Zacks Consensus Estimate for TreeHouse Foods’ current fiscal-year EPS suggests growth of around 106% from the corresponding year-ago reported figure.
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Altria's (MO) Q4 Earnings Top Estimates, Revenues Decline Y/Y
Altria Group Inc. (MO - Free Report) delivered fourth-quarter 2023 results, wherein the bottom line came ahead of the Zacks Consensus Estimate while remaining flat year over year. Though the company benefited from pricing power, soft cigarette shipment volumes continued hurting revenues.
On Jun 1, 2023, Altria concluded the buyout of NJOY Holdings Inc., which is contributing to the company’s performance.
Quarter in Detail
Adjusted earnings came in at $1.18 per share, which remained flat year over year and came a penny ahead of the Zacks Consensus Estimate of $1.17. The reduced number of shares outstanding and the lower tax rate were negated by a decline in adjusted operating companies income (OCI).
Altria Group, Inc. Price, Consensus and EPS Surprise
Altria Group, Inc. price-consensus-eps-surprise-chart | Altria Group, Inc. Quote
Net revenues fell 2.2% year over year to $5,975 million, mainly due to reduced net revenues in the smokeable product unit. After deducting excise taxes, revenues were down 1.2% to $5,024 million. The Zacks Consensus Estimate for revenues was pegged at $5,085 million.
Segment Details
Smokeable Products: Net revenues in the category decreased 3.3% year over year to $5,274 million due to the reduced shipment volume and increased promotional investments, partly compensated by greater pricing. Revenues, net of excise taxes, fell 2.4%. The consensus mark for the segment’s revenues was pegged at $5,296 million for the quarter under review.
Domestic cigarette shipment volumes tumbled 7.6%, mainly due to the industry’s decline rate and retail share losses, partly compensated by trade inventory movements. The industry’s decline was a result of macroeconomic pressure on Adult Tobacco Consumers’ (“ATC”) disposable income and increases in illegitimate e-vapor products. Altria’s reported cigar shipment volumes decreased 1.4%.
Adjusted OCI in the segment declined 1.3% to $2,568 million, with higher pricing and reduced costs being more than offset by reduced shipment volumes, elevated promotional investments and increased per-unit settlement charges. However, adjusted OCI margins grew 0.6 percentage points to 59%.
Oral Tobacco Products: Net revenues in the segment rose 6.6% from the year-ago quarter’s level to $674 million. The upside can be attributed to improved pricing and reduced promotional investments, partly negated by the increased percentage of on! shipment volumes relative to MST and reduced MST shipment volumes. Revenues, net of excise taxes, grew 7.1%. The Zacks Consensus Estimate for the segment’s revenues stood at $687 million for the fourth quarter.
Domestic shipment volumes fell 2%, mainly due to retail share losses in MST. This was somewhat offset by the industry’s growth rate and other aspects.
Adjusted OCI rose 10.3% to $408 million, mainly due to increased pricing and a decline in promotional investments, somewhat negated by elevated costs, the changed mix and reduced MST shipment volumes. Adjusted OCI margins climbed 1.8 percentage points to 63.1%.
Other Updates
Altria ended the quarter with cash and cash equivalents of $3,686 million, long-term debt of $25,112 million and a total stockholders’ deficit of $3,540 million.
MO repurchased 22.7 million shares for $1 billion during the full year 2023, thereby concluding its previous buyback program. Management unveiled a new repurchase program worth $1 billion, which is anticipated to be concluded by Dec 31, 2024.
During the fourth quarter, the company paid out dividends of $1.7 billion. In 2023, it paid out dividends worth $6.8 billion.
Guidance
Altria’s results reflect its resilience amid a tough macroeconomic landscape, with ATC spending patterns being affected by overall inflation.
For 2024, the company envisions the adjusted EPS in the range of $5.00-$5.15, indicating growth of 1-4% from the $4.95 recorded in 2023. Management expects the bottom-line growth to be skewed toward the second half of 2024. The guidance includes the impact of two extra shipping days in 2024.
As the external landscape remains dynamic, MO continues assessing economic factors like inflation, ATC dynamics (such as purchasing patterns and the adoption of smoke-free products), illegal e-vapor enforcement and regulatory developments.
The bottom-line view also considers planned investments associated with enhanced smoke-free product research, development and marketplace activities to support MO’s smoke-free products.
Shares of this Zacks Rank #4 (Sell) company have dropped 10.4% in the past six months compared with the industry’s decline of 8.5%.
3 Solid Consumer Staple Picks
Lamb Weston (LW - Free Report) , which offers frozen potato products, currently carries a Zacks Rank #2 (Buy). LW has a trailing four-quarter earnings surprise of 28.8%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Lamb Weston’s current fiscal-year sales and earnings per share (EPS) suggests growth of 28.3% and 26.9%, respectively, from the year-ago reported numbers.
Sysco Corporation (SYY - Free Report) , a company engaged in the marketing and distribution of various food and related products, currently carries a Zacks Rank #2. SYY has a trailing four-quarter earnings surprise of 1.2%, on average.
The Zacks Consensus Estimate for Sysco’s current fiscal-year sales and EPS suggests growth of 4.3% and 8.2%, respectively, from the corresponding year-ago reported figures.
TreeHouse Foods (THS - Free Report) , a private-label food and beverage company, currently carries a Zacks Rank #2. THS has a trailing four-quarter earnings surprise of 26.5%, on average.
The Zacks Consensus Estimate for TreeHouse Foods’ current fiscal-year EPS suggests growth of around 106% from the corresponding year-ago reported figure.