Altria Group Inc (MO)

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Altria swings to quarterly loss as it books $4.1 billion impairment charge on Juul investment
By: MarketWatch | January 30, 2020

Altria Group Inc. MO, -0.12% said Thursday it had a net loss of $1.809 billion, or $1.00 a share, in the fourth quarter, after income of $1.250 billion, or 66 cents a share, in the year-earlier period, weighed down by a $4.1 billion impairment charge on its investment in e-cigarette maker Juul. Adjusted per-share earnings came to $1.02, matching the FactSet consensus. Revenue net of excise taxes came to $4.802 billion, up 0.3% from a year ago, and below the $4.883 billion FactSet consensus. "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," Chief Executive Howard Willard said in a statement. Altria said the Juul charge is mostly related to the growing number of legal case against Juul that are expected to increase. The company has revised the terms of its investment to include provisions that will push underage use prevention. Juul will add two Altria directors to its board as soon as it receives antitrust clearance for the investment, along with three independent directors, the Juul CEO and three directors designated by Juul shareholders. Altria also has the option to be released from non-compete clauses if Juul is banned by federal law from selling e-vapor products in the U.S. for at least a year, or if the carrying value of its Juul investment is not more than 10% of its initial carrying value of $12.8 billion. Altria expects full-year adjusted EPS of $4.39 to $4.51, wrapping around the FactSet consensus of $4.45. Shares were not active premarket but have gained 4% in the last 12 months, while the S&P 500 SPX, -0.09% has gained 22%.

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