Altria Group (NYSE:MO) announced its results for the most recent quarter on October 25, 2012. Altria Group manufactures and sells cigarettes and tobacco products as well as maintaining a portfolio of leveraged and direct finance leases.
Investors should care about a company's quarterly earnings because it shows the state of the business over the past 90 days and provides guidance for the following 90 days. SEE: 5 Tricks Companies Use During Earnings Season
The Numbers: Altria Group's revenues topped expectations, though the company's EPS fell short of predictions. The company reported 32 cents per share versus the 58 cents per share estimate and revenues of $6.24 billion versus the $4.5 billion estimate. EPS fell 43.9% while revenue climbed 2.2% from the same period last year. The company's net income for the quarter fell 44% to $657 million. With last quarter's falling profit, the company breaks a streak of two consecutive quarters of year-over-year profit increases.
Management Quote: "Altria delivered solid financial results for the third quarter and first nine months of 2012 while taking steps to strengthen its ability to create shareholder value in the future," said Marty Barrington, Chairman and Chief Executive Officer of Altria. "Our tobacco businesses grew their adjusted OCI, adjusted OCI margins and retail share for the third quarter and first nine months of 2012, while investing to develop their brands for the long term."
A Look Back: Net income has increased 26.1% year-over-year on average across the last five quarters. The biggest gain came in the second, when income climbed more than twofold from the year-earlier quarter.
Looking Ahead: When earnings estimates stay consistent leading up to earnings season, this usually shows analysts accurately predicted earnings estimates and business is stable. Be cautious though as this may also be a warnings sign that earnings could come at a huge surprise to the upside or downside as analyst did not correctly predict earnings. Steady earnings estimates mean there is not enough change going on with the company to make analysts change their opinions. When earning estimates are steady, investors can look at the revenue trend for a more fundamental indicator. The average estimate for the fiscal year has remained at $2.21 per share.