On Thursday, good news from one of the market's favorite "sin stocks" drove its share price up by almost 8%. This lucky company was Altria(NYSE: MO); the cigarette maker's latest quarterly earnings report was received most favorably by market players. The stock's pop on the day was in market contrast to the 1.9% slump of the benchmark S&P 500 index.
Slight increases and modest beats
That morning, Altria released its third-quarter figures, which were slightly higher than the consensus analyst estimates. The tobacco giant also reaffirmed its existing full-year guidance.
The quarter saw the company book $5.34 billion in net revenue, which was up by 1% from the same period of 2023. Meanwhile, non-GAAP (adjusted) net income improved over that time span, rising by nearly 4% to a shade under $2.36 billion ($1.38 per share).
Both headline numbers topped pundit projections, although not spectacularly. The consensus analyst expectation for revenue was $5.32 billion, and that for adjusted profitability was $1.35 per share.
For years, Altria has been contending with precipitous declines in the traditional cigarette market due to a general consumer move to more healthy lifestyle choices (in addition to concentrated anti-smoking efforts by authorities). However, vaping products and other consumption alternatives have found quite a niche in the market.
The company did well with next-generation products during the quarter. Its shipment volume for NJOY electric cigarette and vaping products more than doubled on a year-over-year basis, and that for its on! nicotine pouches saw a 46% increase.
Full-year guidance maintained
Altria also maintained its adjusted net income guidance for the entirety of 2024; since this means growth over the 2023 numbers if fulfilled, the market found this encouraging. Management is expecting $5.07 to $5.15 per share for the line item, which would shake out to annual growth of at least 2.5%.
The company continues to do a decent job coping with the end of the Cigarette Era, although it remains to be seen whether next-generation products can ultimately offset the severe shrinking of the traditional segment.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
