Economy

Juul forces tobacco giant Altria to take $4.1B write-down

Juul forces tobacco giant Altria to take $4.1B write-down”

Analysts polled by FactSet predict $4.45 per share. Consensus estimates called for EPS of $1.02 and revenue of $4.88 billion.

Shares of USA tobacco giant Altria tumbled on Wall Street Thursday after the tobacco giant released a fourth-quarter earnings report that showed it took a $4.1 billion hit due to its investment in e-cigarette maker Juul, which is under legal fire amid a rise in vaping among teens.

Altria invested $12.8 billion in Juul in December 2018 in an attempt to expand sales beyond traditional cigarettes as smoking rates decline, according to a CNBC report .

CEO outlook: "Despite the unexpected challenges related to our investment in JUUL, which led to impairment charges and reported losses, we made significant progress advancing and building our noncombustible business platform with the launch of IQOS and completion of the on! transaction".

The impairment charges sent GAAP earnings into negative territory. It retracted an original agreement to support Juul's marketing and distribution, and reworked Juul's board to include Altria representatives.

In its fourth-quarter, Altria posted a net loss of $1.81 billion, or $1.00 a share, compared with net income of $1.25 billion, or 66 cents a share, a year ago.

Under the new agreement, Altria will continue to provide assistance to Juul on regulatory affairs services, but will by the end of March 2020 "discontinue" other services.

The new agreement also allows Altria to develop its own vaping products if Juul is prohibited from selling e-cigarettes in the U.S. for at least a year.

A major investor in leading e-cigarette-maker Juul has seen its stake in the company drop by more than two-thirds.

Until the Federal Trade Commission's review is complete, Altria can't convert its nonvoting shares to voting shares, appoint representatives to Juul's board or count Juul's earnings toward its own earnings. Altria said it has $500 million remaining in its current buyback program and it expects to run that to zero by the end of this year.

Altria's loss in the fourth quarter was reported at $1.81 billion that translates to $1 per share.

Altria Group Inc. now expects no earnings contributions from Juul through 2022, and it's lowering its adjusted earnings growth forecast for 2020 through 2022 to between 4% and 7%. The stock's 52-week range is $39.30 to $57.88.



Like this

loading...
loading...

Latest


03 February 2020
Hong Kong union calls strike to demand China border closure
HAEA chairwoman Winnie Yu said she expected around 9,000 of the alliance's roughly 18,000 members to strike on Tuesday. About 90 percent of the city's food is imported, with the bulk coming from the mainland, according to official data.

03 February 2020
Sonny Bill Williams makes losing Super League debut with Toronto Wolfpack
Toronto will play Castleford as part of Super League's first double header at Leeds' Emerald Headingley Stadium. They wanted to play me for 20 or 30 minutes, but I felt really good and it was a great atmosphere.

03 February 2020
Firing outsise Jamia Millia Islamia University amidst anti-CAA protests
Asim Mohammed Khan, a former Congress Member of Legislative Assembly (MLA) from Okhla, said the incident occurred around 11.30 pm. "It is the Delhi Police's responsibility to take control of law and order situation, which is going out of hand", the JCC said.

03 February 2020
Halsey Calls Out Fan Who Was Shouting "G-Eazy" at Miami Concert
Halsey and G-Eazy broke up in October 2018 after reportedly having somewhat of an on/off relationship. Fan footage of her blowing up at the fan has gone viral online.

03 February 2020
Bill Murray Reprises 'Groundhog Day' Role in Jeep Ad
He starts each morning to Sonny and Cher's " I Got You Babe " before taking Punxsutawney Phil on various adventures. The amazingly nostalgic commercial was reportedly shot last weekend in Woodstock Square, Illinois.

03 February 2020
Brad Pitt's BAFTAs royal family joke resulted in some serious awkward laughter
Hearing Margot's candour and flawless minimal-faff delivery of Brad Pitt's speech is everything, truly. Brad Pitt made a joke about Prince Harry leaving the United Kingdom in his BAFTA acceptance speech.

03 February 2020
Apple begins trial production of iPhone 9 / iPhone SE 2
Earlier this week, he said Apple has several new devices planned for the first half of this year, including a 4.7-inch LCD iPhone. It's no secret that the majority of people can't afford an Apple device, especially when it comes to emerging markets.

03 February 2020
11th Case In US Confirmed In California
There have been 12 confirmed cases in Australia - four in NSW, four in Victoria, two in Queensland and two in South Australia. Duque III confirmed that it was an imported case of the virus with no evidence of local transmission.

03 February 2020
Poll shows majority believe Trump abused power and obstructed Congress
The chief justice ruled that out Friday, saying, "I think it would be inappropriate". But it wasn't enough for impeachment, said the senator, who is retiring in 2020.

03 February 2020
Disha Patani wishes to be a superhero in an action film
Disha Patni said, 'I am looking for a special person who can make me feel like a special girl.' Malang is directed by Mohit Suri. From events, reality shows to conferences, the actress have been making heads turn with her appearances.