Altria Group, Inc. is scheduled to announce its third-quarter
earnings before the market opens Thursday. Here's what you need to
know:
EARNINGS FORECAST: Profit of 68 cents a share is the consensus
of analysts surveyed by Thomson Reuters, compared with 65 cents per
share a year earlier. The company hasn't provided guidance for the
quarter, but in July, it narrowed its full-year guidance to $2.54
per share to $2.59 per share. Analysts expect $2.57 a share.
REVENUE FORECAST: Revenue of $4.74 billion is forecast compared
with $4.76 billion a year earlier.
WHAT TO WATCH:
PRICING: Altria raised prices on its cigarette brands by more
than 60 cents a carton in May, which helped offset declines in
cigarette volume earlier this year. With industry volumes falling
2.3% over the quarter, lower than historical averages, analysts
expect profitability of the company's flagship Marlboro brand to be
strong.
ELECTRONIC CIGARETTES: Altria began a national rollout of its
MarkTen e-cigarette brand in June. It has invested heavily in
marketing and sales to support the brand, but at the start of the
month, MarkTen claimed just a 9% share of the retail market and
trailed category-leaders Blu (27% share) and Vuse (24% share),
according to analysis of IRI data by Morgan Stanley. It will
continue promoting the brand in the coming months, but it will need
to pick up market share to offset future promotional spending.
SMOKELESS TOBACCO: It's supposed to get worse before it gets
better for Altria's smokeless brand Skoal. Altria is in the midst
of turning around the brand. Its volume decreased 6.1% during the
second quarter. The decrease was offset by Altria's Copenhagen
brand, which rose 7.8% over the period. Analysts expect another
decrease for Skoal this quarter. While Copenhagen's growth helped
the smokeless products group increase revenue 3.6% over the first
half of the year, Skoal's turnaround is key to future growth.
Write to Tripp Mickle at tripp.mickle@wsj.com
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