Understanding how Altria Group Inc (NYSE:MO) is performing as a company requires looking at more than just a years’ earnings. Today I will run you through a basic sense check to gain perspective on how Altria Group is doing by comparing its latest earnings with its long-term trend as well as the performance of its tobacco industry peers. View our latest analysis for Altria Group
Was MO weak performance lately part of a long-term decline?
For the most up-to-date info, I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This method allows me to analyze many different companies on a more comparable basis, using the latest information. For Altria Group, its most recent earnings (trailing twelve month) is US$10.21B, which, relative to the prior year’s figure, has plunged by -28.19%. Given that these figures may be somewhat nearsighted, I have estimated an annualized five-year value for Altria Group’s net income, which stands at US$6.16B This shows that although earnings growth was negative from the previous year, over a longer period of time, Altria Group’s profits have been growing on average.How has it been able to do this? Let’s take a look at if it is merely a result of industry tailwinds, or if Altria Group has seen some company-specific growth. In the past few years, Altria Group expanded its bottom line faster than revenue by efficiently controlling its costs. This has led to a margin expansion and profitability over time. Eyeballing growth from a sector-level, the US tobacco industry has been relatively flat in terms of earnings growth over the last few years. This suggests that any recent headwind the industry is experiencing, it’s hitting Altria Group harder than its peers.
What does this mean?
Altria Group’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that are profitable, but have volatile earnings, can have many factors influencing its business. I suggest you continue to research Altria Group to get a better picture of the stock by looking at the areas below. Just a heads up – to access some parts of the Simply Wall St research tool you might be asked to create a free account, but it takes just one click and the information they provide is definitely worth it in my opinion.
- 1. Future Outlook: What are well-informed industry analysts predicting for MO’s future growth? Take a look at this free research report of analyst consensus for MO’s outlook.
- 2. Financial Health: Is MO’s operations financially sustainable? Balance sheets can be hard to analyze, which is why Simply Wall St does it for you. Check out important financial health checks here.
- 3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore a free list of these great stocks here.