What to look for when Altria (MO) reports Q3 2024 earnings results

Shares of Altria Group, Inc. (NYSE: MO) stayed green on Monday. The stock has gained 24% year-to-date. The tobacco giant is slated to report its earnings results for the third quarter of 2024 on Thursday, October 31, before market open. Here’s what to expect from the earnings report:

Revenue

Analysts are projecting revenue of $5.33 billion for Altria in Q3 2024. This compares to revenue of $5.27 billion reported in the same period a year ago. In the second quarter of 2024, revenues decreased 3% year-over-year to $5.27 billion.

Earnings

The consensus estimate for Q3 2024 earnings is $1.35 per share, which compares to adjusted EPS of $1.28 reported in Q3 2023. In Q2 2024, adjusted EPS remained flat YoY at $1.31.

Points to note

Altria continues to see momentum in its smoke-free business. In Q2, in the e-vapor category, the company saw shipment volume of NJOY consumables increase 14.7% sequentially to 12.5 million units, while NJOY devices shipment volume increased 80% sequentially to 1.8 million units. However, the broader e-vapor market is seeing an overflow of illicit disposable products which is a concern.

A tough macroeconomic environment, which has impacted discretionary spending, as well as the growth of illegal disposable e-vapor products have pressured cigarette industry shipment volumes. Last quarter, Altria saw revenues in its smokeable products segment fall 5.6%, with a 13% drop in domestic cigarette shipment volume.

MO is seeing growth in its oral tobacco products segment which saw revenues grow by 4.6% in Q2. The growth was mainly driven by higher pricing. Although domestic shipment volume for oral tobacco products dropped 1.8% due to retail share losses last quarter, the company saw 37% growth in shipment volume for on! nicotine pouches. Total US oral tobacco category share for on! nicotine pouches grew 1.2 share points to 8.1% in Q2.

Altria’s third quarter results are likely to have benefited from gains in its smoke-free portfolio, led by NJOY and on! The declines in cigarette volumes continue to be a concern but higher pricing is likely to offset some of these headwinds.