Tuesday, October 16, 2007

Altria Earnings Preview

Altria (MO) reports tomorrow and now that the PMI spin has been announced, what do we care about in Q3?

It would be nice if we got more news on the spin but we won't, that will come during the upcoming board meeting in January. The recent SEC filing gave us some details.

Altria is expected to report EPS of $1.14, about the same as last quarter, and less than the $1.39 actual EPS from the same period last year. Not much to get excited about. What are we looking for then? Will we get more dividend news? No. Buyback plans? Not likely. Well what?

Smokeless results. The testing is done and it should be on sale now. Smokeless tobacco use is growing and Altria's first ever entry here ought to be a hit and a key earnings driver going forward. Hopefully Altria will be able to give us some future visibility here.

All in all expect this to be a awfully uninspiring and uninformative event and just a setup for the January results and spin details. Cammilleri will most likely tease us by acknowledging all the "possibilities" (dividend increases, buybacks etc) the two companies can employ to return cash to shareholders but then stop short of really telling us anything concrete.

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