This Stock Is Smoking After Q2 Earnings
Each year, fewer people in the U.S. smoke cigarettes, but that hasn't stopped tobacco giant Altria Group (NYSE: MO) from continuing to bring in profits. The company reported its second-quarter 2021 earnings on July 29 and showed investors that its business remains hot. Here are three major takeaways that could mean continued success for the Marlboro maker moving forward.
Altria has signaled that it's striving for a "smoke-free future," where consumers use reduced-risk products such as sister company Philip Morris International's IQOS product, oral nicotine pouches, and electronic cigarettes. However, the financials show that cigarettes are still paying the bills. In 2020, Altria received 88% of its total revenue from smokeable products such as cigarettes and cigars.
Reduced-risk products are strategic for Altria, but it could be a while until they begin to offset cigarette and cigar sales. This makes leading cigarette brand Marlboro very important to the company. As a premium brand, its profit margins are higher than the lower-priced discount brands the company also sells.
Source Fool.com
