What to expect when Altria Group (MO) reports its Q4 2023 earnings

Shares of Altria Group, Inc. (NYSE: MO) stayed green on Monday. The stock has dropped 9% over the past 12 months. The cigarette maker is slated to report its fourth quarter 2023 earnings results on Thursday, February 1, before market open. Here’s a look at what to expect from the earnings report:

Revenue

Analysts are projecting revenues of $4.7 billion for Altria in Q4 2023, which compares to net revenues of $6.1 billion reported in the same period a year ago. In the third quarter of 2023, net revenues declined 4% year-over-year to $6.3 billion.  

Earnings

The consensus estimate for EPS in Q4 2023 is $1.08, which compares to adjusted EPS of $1.18 reported in Q4 2022. In Q3 2023, adjusted EPS remained flat at $1.28.

Points to note

Altria’s top line decrease last quarter was caused by a drop in revenue from its smokeable products segment. The declining revenue and shipment volume in this segment, which is the company’s largest, is currently a cause of major concern.

In Q3, smokeable products revenue fell 5%, mainly driven by an 11.6% decrease in domestic cigarette shipment volume. Although the company still retains a major share in the cigarette category, there is wariness over how long this could continue.

The impact of inflation on Adult Tobacco Consumers’ (ATC) disposable income has weighed on the smokeable products segment. Altria has been benefiting from higher pricing thus far, but going forward, high prices could negatively impact volumes.

On the other hand, the company has been benefiting from growth in its oral tobacco products segment, which saw revenues increase over 2% in Q3. Shipment volume for on! nicotine pouches grew nearly 37% last quarter.

Altria’s focus on smoke-free products and its acquisition of NJOY are steps in the right direction. The company expanded the distribution of e-vapor device NJOY ACE to around 42,000 stores in Q3 and on its Q3 earnings call, it forecast the ACE expansion to reach a total of 70,000 stores in Q4.