Categories AlphaGraphs, Consumer, Earnings

Altria’s shares gain after Q4 results match expectations

Altria Group Inc. (MO) reported revenue and earnings in line with consensus estimates for the fourth quarter of 2018. Shares were up 1% in morning trade on Thursday.

Net revenues remained flat at $6.1 billion. Revenues, net of excise taxes, grew 1.5% to $4.8 billion. Net income dropped 75% to $1.25 billion, or $0.66 per share, mainly due to lower income taxes in 2017, resulting from tax reform benefits, as well as higher asset impairment and acquisition-related costs in 2018. Adjusted EPS grew 4.4% to $0.95.

Net revenues in Smokeable products saw a slight increase of 0.4% as higher pricing and lower promotional investments were offset by lower shipment volume. Revenues net of excise taxes rose 1.9%. Net revenues in Smokeless products dropped 0.5%, mainly due to lower shipment volume, while revenues, net of excise taxes, fell 0.2%.

In Smokeable products, domestic cigarette shipment volume fell 4.4%, on a reported basis, mainly due to the industry’s rate of decline and retail share losses. On an adjusted basis, volumes fell by around 5.5%. In Smokeless products, reported domestic shipment volume dropped 1.9%, primarily driven by the industry’s rate of decline. On an adjusted basis, shipment volume fell around 2%.

Altria announces minority stake in JUUL and cost reduction plans

In the Wine segment, net revenues decreased 11%, mainly due to lower shipment volume, partially offset by favorable premium mix.

For full-year 2019, Altria expects adjusted EPS to grow 4-7% from 2018 to a range of $4.15 to $4.27. The company expects the total domestic cigarette industry volume to decline 3.5% to 5%. For the year, capital expenditures are expected to range between $225 million and $275 million.

During the quarter, Altria acquired stakes in cannabinoid company Cronos Group (CRON) and vaping company JUUL (JUUL). The company took a 45% stake in Cronos for around $1.8 billion and a 35% stake in JUUL for $12.8 billion.

 

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