Altria Group Inc.
) is set to report first-quarter fiscal 2014 results on Apr 24.
Last quarter, the company posted a negative surprise of 1.7%.
Let's see how things are shaping up for this announcement.
Factors to Consider This Quarter
Altria has been witnessing declining volumes for the past few
quarters due to growing awareness against tobacco products.
Worldwide anti-tobacco campaigns and consciousness among people
against the harmful effects of tobacco are shifting consumer
preference away from cigarettes and other traditional tobacco
Accordingly, the company has been reporting soft top lines in
both the smokeable and smokeless segments for the past few
quarters because of the ongoing industrial headwinds discussed
above. We do not expect these conditions to improve in the
quarter. Earnings of the company have been growing regularly only
due to tailwinds from lower excise tax and share buybacks -
suggesting lack of significant growth in the core business.
Moreover, e-cigarettes are now being considered by both the
French and EU governments as tobacco products which face the same
restrictions as other such products. These developments are
expected to further hurt volumes of 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
Negative Zacks ESP:
ESP for Altria is -1.75%. This is because the Most Accurate
estimate stands at a loss of 56 cents a share, while the Zacks
Consensus Estimate is pegged at a loss of 57 cents.
Zacks Rank #4 (Sell):
We caution against stocks with Zacks Rank #4 and 5 (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies that investors may want to
consider as our model shows they have the right combination of
elements to post an earnings beat this quarter:
Coca Cola Enterprises Inc.
), Earnings ESP of +2.27% and a Zacks Rank #2 (Buy).
The Cheesecake Factory Inc.
), Earnings ESP of +2.04% and a Zacks Rank #3.
Church & Dwight Co. Inc.
), Earnings ESP of +1.37% and a Zacks Rank #3.
CHEESECAKE FACT (CAKE): Free Stock Analysis
COCA-COLA ENTRP (CCE): Free Stock Analysis
CHURCH & DWIGHT (CHD): Free Stock Analysis
ALTRIA GROUP (MO): Free Stock Analysis Report
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