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Altria (NYSE:MO) Q3 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

Altria Group, Inc. (NYSE:MO) is scheduled to report Q3 earnings results on October 30, 2020.

The company is expected to report earnings of $1.16/share on revenue of $5.526 billion. The consensus earnings per share (EPS) of $1.16/share is based on a poll of 14 analysts and represents a decline in eps of −2.8% over the same quarter last year, when the company reported earnings of $1.19/share.

The revenue forecast of $5.526 billion based on a poll of 11 analysts implies a year-over-year (YoY) growth in revenue of 2.1%. Last year the company reported $5.412 billion in revenue for the quarter.

Expected to report EPS contraction of −2.8% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $5,526.43 $5,412.00 2.1%
EPS $1.16 $1.19 −2.8%

Earnings Call Trends

Historically, management has exceeded analyst expectations 5 out of the last 8 tracked quarters, missed 2 quarters, and met expectations 1 quarters.

What are your expectations from Altria Group, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $1.06 $1.09 2.9% Beat
Q1, 2020 $0.99 $1.09 10.4% Beat
Q4, 2019 $1.02 $1.02 −0.1% Missed
Q3, 2019 $1.15 $1.19 3.9% Beat
Q2, 2019 $1.10 $1.10 0% Met
Q1, 2019 $0.93 $0.90 −2.9% Missed
Q4, 2018 $0.95 $0.95 0.1% Beat
Q3, 2018 $1.06 $1.08 1.5% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −1.2%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 28, 2020 $42.13 $41.63 −1.2% Decline
April 30, 2020 $40.47 $37.91 −6.3% Decline
January 30, 2020 $50.11 $47.53 −5.1% Decline
October 31, 2019 $45.96 $45.06 −2.0% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.74, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.74 implies a 0.0% chance of earnings manipulation.

Fundamentals And Technical Analysis

Altria Group, Inc. is currently trading at $38.57/share, down −1.3% for the day. The company is trading at approximately 74.5% of its 52-week high of $51.77/share. The company’s stock price is down −7.4% since the last earnings report and down −0.3% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 32.41 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:MO Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −77.74 and a forward P/E multiple of 9.02.

Altria Group, Inc.’s current share price also implies a price-to-book (P/B) multiple of 12.60. The following table summarizes some other key fundamental ratios:

Data as of October 27, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $38.57
P/E Ratio −77.7x
P/E Ratio (Fwd) 9.0x
PEG Ratio 0.7
Total Debt / Total Capital 28.5%
Levered Free Cash Flow $10.118 billion
EV / EBITDA 6.3x

Finbox

Altria Group, Inc. is a large-cap stock with a market capitalization of $71.678 billion and a total enterprise value of $96.03 billion. The company operates in the Consumer Staples sector and the Tobacco industry.

Altria Group, Inc., through its subsidiaries, manufactures and sells cigarettes, smokeless products, and wine in the United States. It offers cigarettes primarily under the Marlboro brand; cigars principally under the Black & Mild brand; and moist smokeless tobacco products under the Copenhagen, Skoal, Red Seal, and Husky brands, as well as provides on! oral nicotine pouches. The company also produces and sells varietal and blended table wines, and sparkling wines under the Chateau Ste. Michelle and 14 Hands names; owns Stag’s Leap Wine Cellars, Conn Creek, Patz & Hall, and Erath wine brands; and imports and markets Antinori, Torres, and Villa Maria Estate wines, as well as Champagne Nicolas Feuillatte in the United States. In addition, it provides finance leasing services primarily in transportation, power generation, real estate, and manufacturing equipment industries. The company sells its tobacco products primarily to wholesalers, including distributors; and large retail organizations, such as chain stores. Altria Group, Inc. was founded in 1822 and is headquartered in Richmond, Virginia.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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