MO Q4 Earnings Beat Estimates on Pricing Despite Low Cigarette Volumes

Altria Group Inc. MO posted fourth-quarter 2024 results, wherein the top and bottom lines beat the Zacks Consensus Estimate. Earnings increased year over year while net revenues essentially came in line with the year-ago quarter’s level. The company’s oral tobacco category continued its growth trajectory with the robust performance of NJOY. We note that NJOY consumables shipment volume increased 15.3% year over year.Altria’s fourth-quarter adjusted earnings came in at $1.29 per share, which advanced 9.3% year over year and beat the Zacks Consensus Estimate of $1.27. Increased adjusted operating income (OCI) and a lesser number of shares outstanding drove the bottom-line growth.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.The company posted net revenues of $5,974 million, which remained almost unchanged year over year. The decrease in net revenues from the smokeable products segment and the all-other category was nearly offset by growth in net revenues from the oral tobacco products segment. Revenues, net of excise taxes, grew 1.6% to $5,106 million. The top line surpassed the consensus mark, which was pegged at $5,049.7 million.Altria Group, Inc. Price and Consensus Altria Group, Inc. price-consensus-chart | Altria Group, Inc. QuoteDecoding Altria’s Segment-Wise ResultsSmokeable Products: Net revenues in the category fell 0.2% year over year to $5,263 million due to reduced shipment volume and increased promotional investments. These were somewhat offset by higher pricing. Revenues, net of excise taxes, rose 1.7%.Domestic cigarette shipment volumes tumbled 8.8% due to the industry’s decline rate and retail share losses. The industry’s decline was a result of persistent discretionary income challenges on Adult Tobacco Consumers (“ATC”) and increases in illegitimate e-vapor products. Altria’s reported cigar shipment volumes rose 2.9%.Adjusted OCI in the segment jumped 5.5% to $2,709 million due to improved pricing. This was somewhat negated by reduced shipment volume, increased promotional investments and escalated SG&A costs. The adjusted OCI margins grew 2.2 percentage points to 61.2%.Oral Tobacco Products: Net revenues in the segment rose 2.7% to $692 million. The upside was primarily driven by higher pricing, although this was partially offset by an increased percentage of on! shipment volume compared with MST year over year (mix change), along with lower shipment volume and increased promotional investments. Revenues excluding excise taxes rose by 2.5%.Domestic shipment volumes inched down 0.4% due to retail share losses and trade inventory movements, among other reasons. This was partly negated by the industry’s growth rate as well as calendar differences.Adjusted OCI increased 13% to $461 million due to increased pricing and reduced SG&A expenses, somewhat negated by a mix change, reduced shipment volume and increased promotional investments. Adjusted OCI margins expanded by 6.4 percentage points to 69.5%.Altria Stock: Other UpdatesThis Zacks Rank #2 (Buy) company ended the quarter with cash and cash equivalents of $3,127 million, long-term debt of $23,399 million and a total stockholders’ deficit of $2,238 million.The company completed its previously approved $3.4 billion share repurchase program. During the fourth quarter, 5.8 million shares were repurchased at a total cost of $310 million. In 2024, the company repurchased 73.5 million shares for a total of $3.4 billion. Additionally, the company authorized a new $1 billion share repurchase program, expected to be completed by Dec. 31, 2025.Altria paid dividends worth $1.7 billion in the fourth quarter and $6.8 billion during 2024.Image Source: Zacks Investment ResearchWhat to Expect From MO in 2025The company expects 2025 adjusted earnings per share (EPS) in the range of $5.22 to $5.37, implying growth of 2-5% from $5.12 reported in 2024. The outlook includes the impact of one fewer shipping day in 2025. Also, the guidance considers the limited effect on combustible and e-vapor product volumes from the enforcement initiatives in the illicit e-vapor market as well as projected cost savings, among others.As the external landscape remains dynamic, Altria continues assessing economic factors like inflation, ATC dynamics (such as purchasing patterns and the adoption of smoke-free products), illegal e-vapor enforcement and regulatory developments.The bottom-line view also considers planned investments associated with enhanced smoke-free product research, development and marketplace activities to support MO’s smoke-free products.For 2025, the adjusted effective tax rate is expected to be between 23% and 24%. Capital expenditures for the year are anticipated to range from $175 million to $225 million, while depreciation and amortization expenses are estimated to be around $290 million.Shares of MO have have declined 3.3% in the past three months against the industry’s 0.3% growth.Here’s How Other Top-Ranked Stocks FaredWe have highlighted other top-ranked stocks from the broader Consumer Staples space, namely Energizer ENR and Ollie's Bargain Outlet OLLI and Helen of Troy HELE.Energizer is one of the world’s leading manufacturers and distributors of batteries and lighting products. It currently has a Zacks Rank #2. ENR has a trailing four-quarter earnings surprise of 8.3%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The Zacks Consensus Estimate for Energizer’s current financial-year sales and EPS suggests growth of 1.3% and 7.8%, respectively, from the year-ago reported numbers. The consensus mark for ENR’s EPS has been unchanged in the past 30 days.Ollie's is a value retailer of brand-name merchandise at drastically reduced prices. The company currently carries a Zacks Rank #2. OLLI has a trailing four-quarter earnings surprise of 5%, on average.The Zacks Consensus Estimate for Ollie's current financial year’s sales and EPS suggests growth of 8.3% and 13.1%, respectively, from the year-ago reported numbers. The consensus mark for OLLI’s EPS has been unchanged in the past 30 days.Helen of Troy, a leading consumer products player that operates through a diversified portfolio of renowned brands, currently carries a Zacks Rank #2. HELE has a trailing four-quarter negative earnings surprise of 4.3%, on average.The Zacks Consensus Estimate for Helen of Troy’s current fiscal-year sales and earnings suggests declines of 5.1% and 18.9%, respectively, from the year-ago quarter’s reported figures.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Altria Group, Inc. (MO): Free Stock Analysis Report Energizer Holdings, Inc. (ENR): Free Stock Analysis Report Helen of Troy Limited (HELE): Free Stock Analysis Report Ollie's Bargain Outlet Holdings, Inc. (OLLI): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks