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Factors Setting the Tone of Altria's (MO) Q1 Earnings Release

Altria Group, Inc. MO is likely to register top-and-bottom-line growth when it reports first-quarter 2023 earnings on Apr 27. The Zacks Consensus Estimate for revenues is pegged at $4,991 million, suggesting a jump of 3.6% from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for the bottom line has risen by a penny in the past 30 days to $1.19 per share. The projection indicates an increase of 6.3% from the year-ago quarter’s reported figure.

Altria has a trailing four-quarter earnings surprise of 0.3%, on average. This tobacco product company’s earnings matched the consensus mark in the last reported quarter.

Altria Group, Inc. Price, Consensus and EPS Surprise

Altria Group, Inc. price-consensus-eps-surprise-chart | Altria Group, Inc. Quote

Factors to Consider

Altria’s focus on oral tobacco, e-vapor and heated tobacco products has been a driver. The company (through its subsidiary Helix Innovations) has full global ownership of on! — a popular tobacco-derived nicotine (TDN) pouch product. on! is a worthwhile addition to MO’s smokeless portfolio as oral TDN products are gaining popularity in the United States due to their low-risk claims. As of the fourth-quarter 2022 earnings call, on! witnessed volume and share growth amid a competitive space in 2022.

Altria remains encouraged about its strategic deal with JT Group, which includes a joint venture for the U.S. commercialization of heated tobacco stick products. The deal was announced in October 2022. These aspects bode well amid soft cigarette volumes.

However, high costs are a concern. Management’s bottom-line view for 2023 takes into account planned investments associated with costs to improve the digital consumer engagement system, enhanced smoke-free product research, development and regulatory preparation expenses and marketplace activities to support MO’s smoke-free products. The view also considers the reduced expected net periodic benefit income.
    
That being said, Altria has been benefiting from its strong pricing power. Though higher pricing might lead to a possible decline in cigarette consumption, it is seen that smokers tend to absorb price increases due to the addictive quality of cigarettes. In the fourth quarter of 2022, higher pricing offered respite to revenues across the Smokeable Products and Oral Tobacco categories. The continuation of these upsides is likely to have aided Altria in the quarter under review.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Altria this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.

Altria has a Zacks Rank #3 and an Earnings ESP of +1.93%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks With the Favorable Combination

Here are three other companies you may want to consider as our model shows that these also have the right combination of elements to post an earnings beat:

Mondelez International MDLZ currently has an Earnings ESP of +1.06% and a Zacks Rank of 3. MDLZ is expected to register a top-line improvement when it reports first-quarter 2023 numbers. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Mondelez’s quarterly revenues is pegged at $8.4 billion, calling for growth of 8.6% from the prior-year quarter’s reported figure. The Zacks Consensus Estimate for the quarterly EPS of 80 cents suggests a decline of 4.8% from the figure reported in the year-ago fiscal quarter. MDLZ has a trailing four-quarter earnings surprise of 7.5%, on average.

The Hershey Company HSY currently has an Earnings ESP of +0.47% and a Zacks Rank of 3. HSY is likely to register top-and-bottom-line growth when it reports first-quarter 2023 results.

The Zacks Consensus Estimate for revenues is pegged at $2.9 billion, suggesting a rise of 8.8% from the prior-year quarter’s reported figure. The Zacks Consensus Estimate for quarterly earnings has moved up by a penny in the last seven days to $2.67 per share, implying growth of 5.5% from the figure reported in the prior-year quarter. HSY has a trailing four-quarter earnings surprise of 11.3%, on average.

Sysco Corporation SYY currently has an Earnings ESP of +3.07% and a Zacks Rank of 3. The company is likely to register a top-and-bottom-line increase when it reports third-quarter fiscal 2023 results. The consensus mark for SYY’s quarterly revenues is pegged at $18.7 billion, which suggests a jump of 10.8% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Sysco’s bottom line has remained unchanged at 92 cents per share in the past 30 days. The consensus estimate indicates a 29.6% improvement from the year-ago quarter’s figure.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Hershey Company (The) (HSY) : Free Stock Analysis Report

Altria Group, Inc. (MO) : Free Stock Analysis Report

Sysco Corporation (SYY) : Free Stock Analysis Report

Mondelez International, Inc. (MDLZ) : Free Stock Analysis Report

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