Altria Group (MO) is set to announce its 4Q16 earnings on February 1, 2017, before the market opens. Altria is a holding company comprising six wholly-owned subsidiaries:
- Philip Morris USA
- U.S. Smokeless Tobacco
- John Middleton
- Ste. Michelle Wine Estates
- Nu Mark
- Philip Morris Capital
Altria also holds a 9.6% stake in Anheuser-Busch InBev (BUD).
In 3Q16, Altria posted adjusted EPS (earnings per share) of $0.82 on net revenue, excluding excise taxes, of $5.2 billion. Analysts were expecting the company to post adjusted EPS of $0.81 on net revenue of $5.1 billion. The better-than-expected 3Q16 earnings appear to have increased investors’ confidence, boosting Altria’s stock price. Altria, in partnership with Philip Morris International (PM), submitted a modified risk tobacco product application for its IQOS, an electronically heated tobacco product, on December 5, 2016. On approval, Altria would receive exclusive rights to market the product in the United States. The approval of the IQOS by the FDA as a modified risk tobacco product could be significantly advantageous.
These factors appear to have increased investors’ confidence, boosting Altria’s stock price. As of January 18, 2017, Altria’s stock was trading at $69.16, which represents a growth of 7.2% since the announcement of its 3Q16 earnings on October 27, 2016.
With Altria’s 4Q16 results just around the corner, this series will focus on what you can expect from the company’s upcoming earnings release. We’ll cover analysts’ estimates for revenue, operating margins, and EPS. We’ll also look at the company’s valuation multiple and expected stock price over the next 12 months. Let’s start by looking at analysts’ revenue estimates for 4Q16.