- Tobacco giant Altria stated it made a note of its financial investment in e-cigarette maker Juul by $4.5 billion during the 3rd quarter.
- The company said no one aspect resulted in the charge, but it did cite the increasing regulative pressure on vaping and flavored e-cigarettes.
- Altria acquired a 35%stake in Juul last year for $128 billion, valuing the business at $38 billion.
- Watch Altria trade survive on Markets Expert
Altria, the owner of Marlboro, wrote down its financial investment in e-cigarette maker Juul by $4.5 billion throughout the third quarter.
While the company stated there was nobody factor that resulted in the write-down, it did mention the heightening regulative analysis around vaping.
” Altria thought about impairment signs in totality, including: increased possibility of U.S. Food & Drug Administration (FDA) action to get rid of flavored e-vapor products from the marketplace pending a market authorization decision, different e-vapor bans put in place by particular cities and states in the U.S. and in certain global markets, and other elements,” Altria said Thursday in its third-quarter revenues release..
The charge eliminated Altria’s profits for the third quarter on an unadjusted basis. The business generated a loss per share of $1.39, compared to a gain of $1.03 per share throughout the same period in 2015.
Changing for one-time charges such as the Juul write-down, Altria reported profits per share of $1.19, narrowly beating Wall Street price quotes of $1.15
The business also posted earnings internet of excise taxes of $5.41 billion, exceeding expert projections of $5.34 billion. Shares rose about 1.6%in morning trading on the profits beat.
Juul’s embattled year has weighed on Altria’s stock cost. The company’s shares have actually fallen about 7%year-to-date, compared to the S&P 500 index’s gain of more than 21%.
The pressure on Juul has grown in current months as federal officials continue to report more vaping-related deaths and diseases..
Altria purchased a 35%stake in Juul last year for $128 billion, valuing the business at $38 billion. Following the write-down, Altria now values Juul at about $24 billion.
Juul did not immediately respond to a demand for comment.