Altria Reports Record Earnings Despite Lower Than Expected Revenue

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Altria Group ($NYSE:MO), Inc. (NYSE: MO) is one of the largest publicly-traded tobacco companies in the world. The company recently reported record earnings despite its revenue falling short of expectations. Altria’s Non-GAAP Earnings Per Share of $1.18 exceeded expectations by $0.01, while its revenue of $4.76B was short of the forecast by $130M. Altria attributed the lower revenue to reduced demand in the cigarette market due to the coronavirus pandemic and a drop in sales of its MarkTen electronic cigarettes.

Despite these declines, Altria was able to report record quarterly earnings due to improved margins, cost cuts, and higher prices on cigarettes. This signals the company’s strong financial performance and commitment to returning value to shareholders.

Market Price

The stock opened at $46.0 and closed at $47.2, up by 1.1% from its prior closing price of $46.7. The lower than expected revenue was mainly attributed to Altria’s smokeless tobacco as well as its wine business. Despite the lower than expected revenue, Altria was still able to deliver strong profitability thanks to their cost-cutting measures, focus on innovation, and strategic investments in other businesses. Altria is confident that their focus on cost-reduction will help them to maintain a competitive advantage in the market and deliver long-term value to their shareholders. Live Quote…

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Altria Group. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Altria Group. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Altria Group. More…

Key Ratios Snapshot

Some of the financial key ratios for Altria Group are shown below. More…

Analysis

At GoodWhale, we believe that examining the fundamentals of ALTRIA GROUP is necessary to gain a better understanding of the company. After analyzing ALTRIA GROUP using our Star Chart, we found that it has a high health score of 8/10. This score reflects strong cashflows and low debt, suggesting that ALTRIA GROUP is capable of handling any crisis without the risk of bankruptcy. Additionally, ALTRIA GROUP is strong in its dividend and profitability, but weaker in assets and growth. Based on these fundamentals, we classify ALTRIA GROUP as a “rhino” company – companies that have achieved moderate revenue or earnings growth. Given the health and fundamental metrics of ALTRIA GROUP, we believe that value investors may be the most interested in it. With its focus on dividend and profitability, investors may find this company attractive for its consistent returns. Additionally, those looking for a more conservative approach to investing may also find value in this company given its strong fundamentals and low risk of bankruptcy. More…

Peers

The tobacco industry is fiercely competitive, with Altria Group Inc up against Swedish Match AB, Imperial Brands PLC, British American Tobacco PLC, and other companies. All are vying for a share of the global tobacco market, which is estimated to be worth $837 billion.

– Swedish Match AB ($LTS:0GO4)

Founded in 1862, Swedish Match is a leading manufacturer of tobacco products with a portfolio of well-known brands, including Red Man, Timber Wolf, and White Owl. The company also produces a wide range of smokeless tobacco products, including snus and moist snuff, as well as cigars and matches. Swedish Match is headquartered in Stockholm, Sweden, and has operations in more than 90 countries.

Swedish Match has a market capitalization of 167.51 billion as of 2022 and a return on equity of -107.57%. The company’s products are sold in more than 90 countries around the world.

– Imperial Brands PLC ($LSE:IMB)

Imperial Brands PLC is a tobacco company with a market cap of 19.07B as of 2022. The company has a Return on Equity of 50.52%. Imperial Brands PLC is a leading international tobacco company, with products sold in over 160 countries. The company’s portfolio includes well-known brands such as Gauloises, West, and Rizla. Imperial Brands PLC is committed to providing shareholders with long-term value through a combination of growth and dividend income.

– British American Tobacco PLC ($LSE:BATS)

British American Tobacco PLC is a large multinational tobacco company with operations in over 50 countries. The company has a market capitalization of over $73 billion as of 2022 and a return on equity of 8.35%. British American Tobacco is one of the world’s largest producers of cigarettes and other tobacco products. The company’s brands include Dunhill, Lucky Strike, and Pall Mall. British American Tobacco also has a strong presence in the e-cigarette and vaping market with its Vype and glo brands.

Summary

Altria Group is a leading tobacco company that has had a strong track record of delivering consistent returns to investors over the years. Recently, the company reported its non-GAAP earnings per share (EPS) of $1.18, beating expectations by $0.01. Total revenue of $4.76 billion, however, fell short of expectations by $130 million. Analysts believe that Altria’s current valuation is attractive and it may be a good time to invest in the company.

Altria has a diversified portfolio of products and a strong global presence, with a strong presence in the United States and abroad. The company has a solid balance sheet and is expected to continue to generate steady cash flows for its investors. Altria remains one of the top picks in the tobacco sector and is likely to reward investors over the long term.