Altria Group Inc. (NYSE: MO) reported its most recent quarterly results before the markets opened on Tuesday. The cigarette firm posted $1.09 in earnings per share (EPS) and $5.06 billion in revenue for the second quarter, which compares with consensus estimates that called for $1.06 in EPS and revenue of $5.04 billion. The same period of last year reportedly had EPS of $1.10 on $5.19 billion in revenue.
Management noted that over the first half of 2020, Altria showed resilience considering the volatile market conditions. This was driven largely by solid financial performance in its core tobacco business and steady progress in the noncombustible product portfolio.
Another recent highlight for Altria was that the FDA authorized its IQOS (I Quit Ordinary Smoking) to be marketed as Modified Risk Tobacco Products with a “reduced exposure claim.”
During the quarter, revenues decreased 2.5% year over year due to lower net revenues in the smokeable products segment.
Smokeable Products net revenues decreased 4.3% to $4.34 billion, driven by lower shipment volume and partially offset by higher pricing and lower promotional investments.
Oral Tobacco Products net revenue increased 9.8% to $626 million, driven by higher pricing and higher shipment volume.
In March, Altria borrowed the full $3 billion available under its revolving credit agreement due to the uncertainty arising from the COVID-19 pandemic. The firm also issued long-term senior unsecured notes of $2 billion in May. On the books, Altria ended the quarter with $4.8 billion in cash and cash equivalents.
Looking forward, the company re-established its 2020 full-year earnings guidance based on a better understanding of the pandemic. Currently, Altria expects to see EPS in the range of $4.21 to $4.38. Consensus estimates call for $4.28 in EPS and $20.45 billion in revenue for the full year.
Altria stock traded up about 2% on Tuesday to $43.01, in a 52-week range of $30.95 to $52.45. The consensus price target is $48.57.
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