Altria Group Third Quarter Earnings Preview

Altria Group reported its third quarter revenue on October 25, 2012.

Revenue is perhaps the single most analyzed number in a firm’s financial statements mainly because they display a firm’s profitability.

The consensus estimate for Altria’s revenue is 58 cents per share, up 3.6 percent compared with year 2011 when the cigarette maker announced revenue of 56 cents per share.


Opened pack of Marlboro cigarettes

The consensus estimate decreased from 60 cents three months ago, but it hasn’t modified in the last month. For the fiscal year, analysts are expecting revenue of $2.21 per share.

Altria is estimated to pass last year’s reported earnings of $4.33 billion and appear in at $4.36 billion for the quarter. For the fiscal year, predicted earnings are $17.34 billion.

For the previous three quarters, earnings have been growing. It went up 62.1% to $6.49 billion in second quarter. Ahead of that, the figure increased by 1.3 percent in the first quarter and 5% in the fourth quarter of the last fiscal year.

The cigarette maker has been profitable for the last eight quarters; earnings have increased year-over-year by an average of 43.6 percent during the most recent four quarters.

MO’s P/E ratio of 15.8 is more than the industry average of 11.79. Generally, the higher the P/E ratio, the higher is the market expectations for a firm’s future performance.

Price/earnings ratios offer a measure of the relative value of a stock. A high or low price/earnings ration is not good or bad in and of itself, but a firm trading with a high price/earnings ratio must keep on to record strong financial performance or its stock price is likely to drop.

The stock cost has dropped 8.3 percent to $32.63 from $35.57 since July, 2012. Altria’s worst recent stretch was when its stock cost dropped $1.96 per share between August 17, 2012 and August 23, 2012.

Altria Group produces and markets cigarettes and tobacco products as well as sustaining a portfolio of leveraged and direct finance leases. Analysts generally think Buy ratings have enhanced a bit over the last three months.

The cigarette group’s main rival in the tobacco industry is Philip Morris (PM). Analysts are less optimistic about Altria than about Philip Morris. Ten out of 13 analysts rate Philip Morris a buy compared to six of 13 for Altria.

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