In 3Q17, Altria Group (MO) posted revenues net of excise taxes of $5.12 billion, which was 1.5% lower than analysts’ estimates of $5.20 billion. Year-over-year, the company’s revenues fell 1.3% from $5.19 billion in 3Q16.
Smokeable Products segment
The net revenues from Altria Group’s Smokeable Products segment fell 1.5% from ~$4.5 billion to ~$4.4 billion. This decline was due to the decline in domestic cigarettes shipment volume of 6.2%. The decline in cigarette volume was due to the industry’s rate of decline, one fewer shipping day, and trade inventory movements.
However, some of the declines were offset by higher pricing and rise in its cigars shipment volume of 6.6%.
Smokeless Products segment
The net revenues from the Smokeless Products segment rose 4.5% to $515.0 million due to higher pricing and lower promotional investments. However, some of the revenue growth was offset by lower volume and unfavorable mix.
During the quarter, Copenhagen posted a strong performance with its volume shipment increasing 0.4%. However, the volume shipment of Skoal fell 6.9%.
During the quarter, the revenue from this segment fell 0.6% to $175.0 million due to increased competition, reduction in trade inventory, and slower growth in the premium wine category.
The revenues from the other segments fell 52.1% to $23.0 million compared to $48.0 million in 3Q16. In the e-vapor category, MarkTen’s volume rose 50.0% in 3Q17 due to growth in the category and the expansion of the distribution network.
During the same period, Philip Morris International (PM) posted revenues of ~$7.5 billion, which represents growth of 7.0% from ~$7.0 billion in 3Q16.
For the next four quarters, analysts are expecting Altria to post revenues of ~$19.9 billion, which represents growth of 2.1% from ~$19.5 billion in the corresponding four quarters of the previous year.
Next, we’ll look at Altria’s margins in 3Q17.