What to expect when Altria (MO) reports Q2 2023 earnings results

Shares of Altria Group, Inc. (NYSE: MO) stayed green on Friday. The stock has dropped over 3% in the past three months. The tobacco giant is scheduled to report its second-quarter 2023 earnings results on Tuesday, August 1, before market open. Here’s a look at what to expect from the earnings report:

Revenue

Analysts are projecting revenues of $5 billion for Q2 2023 which compares to $5.37 billion in the prior-year quarter. In the first quarter of 2023, revenues declined 2.9% year-over-year to $5.7 billion.

Earnings

The consensus estimate for Q2 2023 EPS is $1.17, which compares to $1.26 in the year-ago period. In Q1 2023, adjusted EPS rose 5.4% YoY to $1.18.

Points to note

In Q1, Altria saw revenues in the Smokeable Products segment decrease 3% due to lower shipment volumes. Domestic cigarette shipment volume dropped 11.4% in Q1. Cigarette volumes have been pressured across the industry due to high inflation and its impacts on consumer discretionary income, which have led to shifts in purchasing behaviors of smokers. For Altria, these pressures were offset to an extent by higher pricing. This trend could have continued in Q2.

The company is likely to benefit from growth in oral nicotine pouch products, which have continued to grow their share of the total oral tobacco category. In Q1, retail share for on! nicotine pouches grew to 6.5%. Oral tobacco products grew revenue by 2.4% in Q1, helped by higher pricing which offset volume declines.

Altria has completed the acquisition of NJOY Holdings, which now gives it access to the latter’s portfolio of e-vapor products. E-vapor has been a very popular choice for moving smokers to alternative products. Altria is focused on increasing the adoption of NJOY ACE, which is, as of now, the only pod-based e-vapor product to receive marketing authorization from the FDA. Further details on this transaction and future plans for e-vapor offerings are worth watching.