Altria's (MO) Q4 Earnings To Gain From Prudent Pricing & RRPs
Zacks Investment Research | Jan 23, 2019 10:12PM ET
Altria Group, Inc. (NYSE:MO) is slated to release fourth-quarter 2018 results on Jan 31, before the opening bell. The company’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average being 4.5%. In fact, the company’s bottom line has been impressive for almost a year now. Let’s delve into how things are shaping up for the upcoming quarterly release and see if this tobacco giant can maintain positive earnings surprise streak.
Smokeless Products & Pricing to Continue Aiding
Rising health consciousnesses is driving consumers to shift to low risk or smokeless tobacco alternatives. Altria is making impressive strides in this realm and has introduced several reduced risk products (RRPs) that are included in the company’s smokeless category. In fact, its flagship MarkTen and Green Smoke e-vapor products are performing well. Such efforts have been boosting the company’s revenues for a while. Further, we note that Altria recently acquired 35% stake in JUUL, a company renowned for advanced and highly differentiated e-vapor products. Also, Altria is undertaking efforts to expand presence in the cannabis-infused products space, evident from its recent announcement to acquire stakes of the Canadian cannabis company — Cronos Group (NASDAQ:CRON) .
Going ahead, the company expects to continue gaining from the rising popularity of RRPs as well as efforts to bolster the segment’s offerings. In fact, the Zacks Consensus Estimate for revenues in the smokeless category for the impending quarter is currently pegged at $588 million. The estimate depicts a rise of almost 2.2% from the prior-year quarter’s tally.
In addition to benefits from RRPs, Altria’s performance is also gaining from higher pricing for products under the smokeable and smokeless segments. Going ahead, the company continues to envision product pricing to be a vital catalyst in revenue expansion.
Altria Group, Inc. Price, Consensus and EPS Surprise
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