Altria Group Inc.
) is set to report fourth-quarter fiscal 2013 results on Jan 30.
Last quarter, it delivered in-line results. Let us see how things
are shaping up for this announcement.
Factors to Consider This Quarter
Altria has been reporting decent earnings results for the past
few quarters backed by higher operating income and pricing power.
Its impressive brand portfolio of tobacco and wine products helps
it to maintain a strong business momentum and generate decent
profit, which we believe will continue in the fourth quarter as
Moreover, Altria adapts itself to new consumer preference and
tastes and is putting thrust on alternative tobacco products.
During the fourth quarter Altria joined forces with
Philip Morris International Inc.
) under which Philip Morris will market Altria's MarkTen
e-cigarettes internationally and the latter will distribute two
of Philip Morris' heated tobacco products in the United
The two companies will also work on gaining shares as well as
improving existing versions for the products. Such collaboration
is encouraging as it will help Altria maintain market share
amidst declining volume of tobacco products in the upcoming
However, anti-tobacco campaigns and awareness of people
against the harmful effects of tobacco are leading to decline in
volume and sales of the company. Moreover, e-cigarettes are now
being considered by both the French and EU governments as tobacco
products and they face same restrictions as normal tobacco
products. These developments are expected to impact volume
negatively for the tobacco companies.
Our proven model does not conclusively show that Altria is
likely to beat earnings this quarter. A stock needs to have both
and a Zacks Rank #1, 2 or 3 to surpass earnings estimate.
However, that is not the case here due to the following
ESP for Altria is 0.00%.
Zacks Rank when combined with a 0.00% ESP makes surprise
We caution against stocks with Zacks Ranks #4 and 5
(Sell-rated stocks) going into the earnings announcement,
especially when the company is seeing negative estimate revisions
Other Stocks to Consider
Here are some other companies you may want to consider as our
model shows that they have the right combination of elements to
post an earnings beat this quarter:
), with Earnings ESP of +1.18% and a Zacks Rank #2 (Buy).
Michael Kors Inc.
), with Earnings ESP of +1.15% and a Zacks Rank #2.
MICHAEL KORS (KORS): Free Stock Analysis
LORILLARD CO (LO): Free Stock Analysis Report
ALTRIA GROUP (MO): Free Stock Analysis Report
PHILIP MORRIS (PM): Free Stock Analysis
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