Check out the latest Altria Group earnings call transcript.

2018 was a monumental year for Altria Group (NYSE:MO). Even as the tobacco giant continued to face the secular decline in cigarette smoking, Altria made huge strides forward on the strategic front. By taking large minority stakes in e-cigarette competitor Juul Labs as well as marijuana producer Cronos Group (NASDAQ:CRON), Altria made it clear that it isn't going to settle for the middling growth opportunities available in its core business.

Investors expect Altria to release its fourth-quarter financial results on Thursday, Jan. 31. Expectations are that the tobacco giant will keep finding ways to produce at least modest growth in its revenue and net income, but many of those listening to company executives will want to know exactly what Altria has in mind for the future. Below, we'll take a closer look at where Altria stands right now and what it's likely to say in its upcoming earnings report.

Stats on Altria Group's Q4 earnings

Metric

Current Stat

EPS estimate

$0.95

Change from year-ago EPS

4.4%

Revenue estimate

$4.84 billion*

Change from year-ago revenue

2.6%

Earnings beats in past 4 quarters

4

Source: Yahoo! Finance. *Net of excise tax.

Here's what Altria's likely to say

Investors have gotten less comfortable with Altria's earnings prospects recently. They've cut their views on the fourth quarter by $0.03 per share in the last few months, and they've made about a 2% reduction in their full-year 2019 estimates as well. The stock has suffered, plunging 27% in the past three months.

Some of that decline came in the aftermath of Altria's third-quarter report back in late October. Modest growth of 3.3% in revenue and 4% in net income gave investors much of what they'd hoped to see, but investors weren't entirely comfortable with the limitations that the company voluntarily assumed by removing certain pod-based e-cigarette devices sold by its Nu Mark subsidiary.

Subsequently, Altria took even more heat on the regulatory front. The U.S. Food and Drug Administration came out with new proposals that could include a full ban on menthol cigarettes. Although Altria has less exposure to menthol than some of its competitors, investors worried that a broader crackdown on favored products in both the cigarette and e-cigarette realms could weigh on its growth prospects. That led Altria to give up entirely on its Mark Ten and Green Smoke lines of e-vapor products.

Four boxes of MarkTen XL products in different colors.

Image source: Altria.

Moving forward

Yet that challenge didn't stop Altria from making some bold moves. In many ways, Altria's decision to invest $13 billion for a 35% stake in Juul Labs was more of an affront to the FDA, as it gave the e-cigarette industry's leading player access to Altria's distribution resources while marking an about-face from its Mark Ten and Green Smoke moves. By combining Juul's popularity with Altria's expertise in the industry, the partnership could prove highly successful -- if it can avoid the wrath of regulatory agencies.

Meanwhile, the tobacco giant's $1.8 billion investment for a 45% stake in Cronos Group looked small by comparison, but it was an arguably more aggressive move in search of future growth. Altria will take an active role with Cronos, having the right to nominate four of Cronos' seven directors and keeping warrants that could allow Altria to take a majority stake in the marijuana producer in the future. Cronos has a long way to go before it can establish itself as a leader in the budding cannabis industry, but it definitely stands to benefit from having Altria in its corner.

In its fourth-quarter earnings report, Altria is likely to present numbers that look fairly similar to what investors have gotten used to seeing in the recent past. What'll be more important are the comments that CEO Howard Willard and his team make about Altria's plans with Juul and Cronos, because those are the wild cards that could lead to dramatic growth in the long run.