Altria Stock (NYSE:MO)
Altria Group Inc. (NYSE:MO) reported results for the fourth quarter of 2022 that rose year over year and met the Consensus Estimate. Net revenues, on the other hand, dropped from the previous quarter. Following the announcement, Altria stock increased by roughly 5%.
Key Findings
Adjusted profits per share were $1.18, up 8.3% year on year and in line with the $1.18 Consensus Estimate. Higher adjusted operating companies income (OCI), a lower number of shares outstanding, and lower interest expenses all contributed to the year-over-year increase.
Year on year, net revenues fell 2.3% to $6,111 million, mainly due to lower net revenues in the smokeable goods sector. After excise taxes, revenues fell 0.1% to $5,083 million.
The Revenue Consensus Estimate is $5,164.2 million.
Specifics by Segment
Smokeable Products: Year on year, net revenues declined 2.4% to $5,456 million due to lower shipping volume, which was somewhat offset by increased pricing and fewer promotional investments. Revenues were similar to the previous quarter, net of excise taxes.
Domestic cigarette shipping volume decreased by 12.1%, owing to the industry’s decline rate, retail share losses, and calendar adjustments. After accounting for changes in trade inventory, calendar shifts, and other factors, the total estimated domestic cigarette industry volume fell by 9%. The volume of cigars shipped by Altria fell by 3.8%.
As a result of higher pricing, lesser promotional spending, and lower per-unit settlement charges, the segment’s adjusted OCI increased by 4% to $2,603 million.
These were countered in part by decreasing freight volume and greater costs.
OCI adjusted margins grew by 2.2 percentage points to 58.4%.
Oral Tobacco Products: Net revenues in this category fell 4.7% year on year to $632 million. The downsides include, among other things, increased promotional investments and decreased shipment volume. Lower prices offset some of these effects. Revenue fell 4% after excluding excise taxes.
Domestic freight volume fell by 4.3%, owing mostly to calendar fluctuations, retail market losses, and other factors. These were partially offset by industrial expansion and trade inventory movements. After accounting for calendar fluctuations and trade inventory movements, the shipment volume of oral tobacco products declined by an estimated 3.5%.
Adjusted OCI decreased 5.1% to $370 million, primarily as a result of increased on! promotional spending decreased shipment volume, and mix change, which was partially offset by higher pricing. OCI margins that were adjusted fell by 0.7 percentage points to 61.3%.
Financial Updates
Altria had $4,030 million in cash and cash equivalents at the end of the quarter, $25,124 million in long-term debt, and a $3,973 million overall stockholders’ deficit.
The corporation finished its $3.5 billion share repurchase program that had previously been authorized. It repurchased 8.3 million shares for $374 million during the quarter under review. The business spent $1.8 billion on the repurchase of 38.1 million shares in 2022. The business approved a fresh $1 billion share repurchase program, which is anticipated to be finished by December 31, 2023.
In the fourth quarter and full year of 2022, the corporation paid dividends of $1.7 billion and $6.6 billion, respectively. The long-term dividend payout ratio for adjusted profits per share that the corporation aims for is roughly 80%. (EPS).
For 2023, Altria forecasts capital expenditures in the $175-$225 million range.
Guidance
Altria estimates adjusted EPS in the $4.98-$5.13 range for 2023, a 3-6% rise from $4.84 in 2022.
External environmental problems such as rising inflation, increased interest rates, global supply-chain challenges, and ATC dynamics such as purchasing patterns, smoke-free product adoption, and disposable income are all being considered by the company.
The bottom line also includes expected investments for costs associated with upgrading the digital customer contact system, better smoke-free product research, development, and regulatory preparation charges, and marketplace initiatives to support the company’s smoke-free products. The viewpoint also considers lower expected net monthly benefit income.
Altria stock has climbed 0.5% in the last three months, compared to 7.6% for the industry.
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