Altria Group Inc. Earnings Cheat Sheet: Margins Expand and Profit Climbs

S&P 500 (NYSE:SPY) component Altria Group Inc. (NYSE:MO) reported higher profit for the third quarter as revenue showed growth. Altria Group manufactures and sells cigarettes and tobacco products as well as maintaining a portfolio of leveraged and direct finance leases.

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Altria Group Earnings Cheat Sheet for the Third Quarter

Results: Net income for the cigarette company rose to $1.17 billion (57 cents per share) vs. $1.13 billion (54 cents per share) in the same quarter a year earlier. This marks a rise of 3.8% from the year earlier quarter.

Revenue: Excluding excise taxes, fell 3% to $4.33 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: MO reported adjusted net income of 56 cents per share. By that measure, the company fell in line with the mean estimate of 56 cents per share.

Quoting Management: “Altria made significant progress in the third quarter on its plans to continue delivering strong returns to shareholders,” said Michael E. Szymanczyk, Chairman and Chief Executive Officer of Altria. “The company increased its dividend 7.9% and grew third-quarter adjusted diluted EPS 3.7%, and our consumer products businesses continued to expand their adjusted operating margins.”

Key Stats:

The company has now fallen in step with estimates for the last three quarters. It reported net income of 53 cents in the second quarter, net income of 44 cents in the first quarter and net income of 44 cents in the fourth quarter of the last fiscal year.

A year-over-year revenue increase last quarter snaps a streak of two consecutive quarters of revenue declines. Revenue fell 7.8% in the second quarter and fell 0.2% in the first quarter.

Margins rose in the second quarter after falling the quarter before. Gross margin rose 13.7 percentage points to 69.2% from the quarter earlier quarter. In the first quarter, the figure rose 5.4 percentage points to 49.3% from the year earlier quarter.

The increase in profit last quarter comes after net income fell in the previous quarter. In the second quarter, net income declined 57.4% to $444 million.

Looking Forward: The average estimate for the fourth quarter is steady at 50 cents a share. For the fiscal year, the average estimate has been unchanged at $2.04 a share.

Competitors to Watch: Reynolds American, Inc. (NYSE:RAI), Lorillard Inc. (NYSE:LO), Philip Morris Intl. Inc. (NYSE:PM), Vector Group Ltd. (NYSE:VGR), Star Scientific, Inc. (NASDAQ:CIGX), Imperial Tobacco Group PLC (ITYBY), British American Tobacco (AMEX:BTI), Alliance One Intl., Inc. (NYSE:AOI), and Universal Corporation (NYSE:UVV).

Investing Insights: Here’s Why Chipotle’s Stock Keeps Winning.

(Source: Xignite Financials)

 

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