We expect Altria Group Inc. MO to beat estimates when it reports first-quarter 2015 results on Apr 23. Last quarter, the company posted a negative earnings surprise of 1.49%. Let’s see how things are shaping up for this announcement.
Why a Likely Positive Surprise?
Our proven model shows that Altria Group is likely to beat earnings estimates this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. Altria has the right combination of the two key components.
Zacks ESP: Altria currently has an Earnings ESP of +1.61%. This is because the Most Accurate estimate stands at 63 cents, while the Zacks Consensus Estimate is pegged at 62 cents.
Zacks Rank: Altria carries a Zacks Rank #2 (Buy). Conversely, the Sell-rated stocks (Rank #4 and 5) should never be considered going into an earnings announcement.
Altria’s Zacks Rank #2 and +1.61% ESP make us reasonably confident of a positive earnings beat.
What's Driving the Better-than-Expected Earnings?
Altria has been reporting decent earnings for the past few quarters backed by higher operating income and pricing power. Its impressive brand portfolio of tobacco and wine products helps it to maintain a strong business momentum and generate decent profit which, we believe, will continue in the first quarter as well.
Altria has been expanding its Mark e-cigarettes nationwide after its successful launch in Indiana in aug 2013, which is impressive.This is expected to boost toplines in the first quarter
Other Stocks That Warrant a Look
Here are some other companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Columbia Sportswear Company COLM, with an Earnings ESP of +5.71% and a Zacks Rank #1 (Strong Buy).
Pilgrims Pride Corp. PPC, with an Earnings ESP of +5.19% and a Zacks Rank #2.
Tyson Foods Inc. TSN, with an Earnings ESP of +2.70% and a Zacks Rank #2.
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