It's been a tough year for Altria Group (NYSE:MO) so far, with the stock having suffered a 10% decline just since the beginning of the year. The tobacco industry is no stranger to volatility, and the turbulence in the overall stock market has only exacerbated some of the specific challenges that Altria has had to face to begin 2018.

Altria expects to let investors know how it did during the first quarter when it reports results on Thursday, April 26. Given the stock's weak performance, shareholders are looking for reassurances that the tobacco giant is doing everything it can to plot a course forward that will lead to continued profit growth. Let's look more closely at what Altria's likely to say and how investors should prepare for its financial report next week.

Four MarkTen packages in different colors on a black background.

Altria's MarkTen reduced-risk product. Image source: Altria Group.

Stats on Altria Group

EPS Estimate

$0.92

Change From Year-Ago EPS

26%

Revenue Estimate

$4.62 billion*

Change From Year-Ago Revenue

0.9%

Earnings Beats in Past 4 Quarters

2

Data source: Yahoo! Finance. *Net of excise tax.

Can Altria pick up the pace?

Investors are getting more optimistic about Altria's earnings. In recent months, they've boosted their views on first-quarter and full-year 2018 earnings by roughly 5%, and they've made even larger moves in boosting their projections for 2019. Yet the stock has been stuck in reverse, falling 9% since mid-January.

There wasn't much fundamentally surprising about Altria's results for the fourth quarter of 2017, with the company reporting in February that revenue net of excise tax dropped slightly but that earnings were sharply higher. One-time impacts from tax reform and the capital gains from the sale of its SABMiller stake caused net income to fall from year-earlier levels on a GAAP basis, but Altria has been a lot stricter in reining in costs, and that has helped keep margin levels higher and bodes well for the company's financial future. Even so, the fact that Altria market share has been on the decline and is now threatening to breach the 50% mark is troubling for investors who've gotten used to the tobacco giant dominating the domestic cigarette market.

What's caused the most concern about Altria is the U.S. Food and Drug Administration's latest push toward regulating nicotine levels in cigarettes. The FDA wants tobacco companies like Altria to reduce the amount of nicotine below where it will be addictive to smokers, and it's unclear how manufacturers would be able to reformulate traditional cigarettes in order to comply with the standard if it goes into force.

In response, Altria has affirmed a commitment to finding reduced-risk products that will keep it at the forefront of the industry. The tobacco giant recently filed for an FDA modified risk designation for its Copenhagen Snuff Fine Cut smokeless tobacco product, arguing that smokeless tobacco is far less harmful from a mortality standpoint than traditional cigarettes. Altria is also hoping that the FDA will approve the iQOS heated-tobacco system for use in the U.S. as a modified risk product, since the company has exclusive rights to license iQOS domestically. With MarkTen e-cigarette products also gaining adoption in the U.S. market, Altria is moving forward on multiple fronts to embrace a potential future without traditional cigarettes.

Altria will have a lot of investors looking to see whether the company can manage to get its sales moving higher once again, as even with consistent profit growth, it's still more reassuring to see top-line gains as well. More broadly, they'll want to keep an eye on how the tobacco giant handles its CEO transition, with longtime leader Marty Barrington set to give way to Howard Willard after Altria's annual shareholder meeting in mid-May. Few expect huge changes for Altria's overall strategy, but if we get some hints about Willard's ideas in his post-earnings comments, it could give some clues about whether the tobacco giant could regain market share in the months and years to come.