Altria Group (MO) posted its fourth-quarter earnings before the market opened on January 31. For the quarter ended on December 31, the company posted adjusted EPS of $0.95 on revenues, net of excise tax, of $4.79 billion. Year-over-year, the company’s revenue increased by 1.5%, while its adjusted EPS rose by 4.4%.
During the quarter, Altria’s adjusted EPS were in line with analysts’ expectations. However, its revenue fell short of analysts’ expectation of $4.81 billion. Despite posting lower-than-expected sales, the company’s stock price rose due to the optimism surrounding Altria’s recent investment in Juul and Cronos Group (CRON). Altria stock closed January 31 at $49.35, a rise of 3.2% from its previous day’s closing price.
In December, Altria agreed to acquire a 45% stake in Cronos Group for $1.8 billion, while the stake can be increased by 10% over the next four years with the excise of the warrant at a price of 19.00 Canadian dollars per share. Also, during the same month, the company announced a $12.8 billion investment in Juul Labs for a 35% stake in the e-cigarette company.
During Altria’s earnings call, Howard Willard, chair and CEO of Altria, said, “When you add to Juul’s already substantial capabilities, our underage tobacco prevention expertise and ability to directly connect with adult smokers, we see a compelling future with long-term benefits for both adult tobacco consumers and our shareholders,” reported CNBC.
Year-to-date stock performance
After falling more than 30% in 2018, Altria is trading flat YTD as of its close on January 31. During the same period, peers Philip Morris International (PM) and British American Tobacco (BTI) have returned 14.9% and 10.7%, respectively. The Consumer Staples Select Sector SPDR ETF’s (XLP) stock price, which invests 8.4% of its portfolio in cigarettes and tobacco companies, has returned 5.1% YTD.
Next, we’ll look at Altria’s fourth-quarter revenue.