It's been a tough year for Altria Group (NYSE:MO) and most of its tobacco-stock peers. Bearish investors point to all kinds of headwinds for the tobacco giant, including threats of tougher regulation from the U.S. Food and Drug Administration and ongoing shifts in consumer demand toward e-cigarettes and other alternatives to Altria's Marlboro cigarette brand. Amid all this controversy, marijuana stocks have been all the rage in the investing community. Those who have high hopes for Altria's long-term growth plans have long wondered whether the tobacco giant would make a strategic move to embrace marijuana at some point.

Altria is set to present its third-quarter financial results on Thursday, Oct. 25, and most investors expect the tobacco giant to find more ways to increase its earnings at a healthy pace even as sales growth stays modest. Yet thanks in part to some comments that Altria representatives recently made at a consumer conference, you can expect a lot of speculation about whether the tobacco company will join the growing group of well-established businesses looking to create partnerships with up-and-coming players in the cannabis space.

Marijuana leaf on top of a pile of $100 bills.

Image source: Getty Images.

Stats on Altria Group's third-quarter earnings

EPS Estimate

$1.07

Change From Year-Ago EPS

18.9%

Revenue Estimate

$5.21 billion*

Change From Year-Ago Revenue

1.8%

Earnings Beats in Past 4 Quarters

4

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

What should you expect from Altria?

Investors have gained some confidence in their views on Altria's earnings prospects. They've boosted their consensus forecast for the company's third-quarter bottom line by $0.01 per share, and similarly modest moves for full-year 2019 projections also point to longer-term interest in Altria. The stock has also rebounded, climbing 10% since mid-July.

Altria's second-quarter report gave investors the same view of the tobacco giant that they've seen for a while. Revenue was down 4% from year-ago levels, which was even worse than most of those following the stock had expected to see from Altria. Domestic shipments of cigarettes were down 11%, and weakness in Marlboro took Altria's market share down by nearly three-quarters of a percentage point to just above the 50% mark. Yet Altria still managed to post earnings that were higher by 16% year over year on an adjusted basis, in part because side businesses like smokeless tobacco and the Ste. Michelle Wine Estates units added to overall performance.

Since releasing its earnings, Altria has gotten some good news in the misfortune of its competitors. The FDA said in September that use of e-cigarettes among teenagers has reached "epidemic proportions," prompting the regulatory agency to mull a complete ban on all flavored e-cigarette products. Even though Altria's MarkTen brand was named among those targeted by the FDA, the company hasn't been able to keep up with industry-leading brand Juul. Anything that slows down the sharp growth in demand for e-cigarettes and other vaping products would therefore be a net positive for Altria, despite its efforts to catch up in that key space.

Yet the big question many investors are asking is when Altria will take steps to enter the marijuana market. Back in May at Altria's annual shareholder meeting, outgoing CEO Marty Barrington was quite forthright in answering an investor's question about the company getting into the cannabis market:

The answer on cannabis is no. It's true that some states are experimenting, but I'm sure you know it's illegal at the federal level. And indeed, it's impossible even to have bank accounts or accounting relationships or legal relationships. And as long as it's illegal, we're not -- that's not a category we're interested in.

In that light, comments from Altria general counsel Murray Garnick at an industry conference in September signaled a potential about-face for the company's marijuana strategy. Garnick repeated that cannabis remains illegal under federal law, but added, "Having said that, we are exploring options, and we're mindful of the possibility that in the future, cannabis may no longer be illegal under federal law." When pressed later, Garnick elaborated that "we're studying and evaluating market opportunities" in the cannabis business, including the question of whether the company would have competitive advantages over alcohol producers and distributors that have already made inroads into the marijuana industry.

Altria's third-quarter earnings will probably show similar trends to what investors have seen for quite a while. Yet with upper-level management opening the door to a more extensive examination of the potential of the marijuana industry, Altria shareholders will be looking for any signs of what the tobacco giant's cannabis strategy is likely to be.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.