Altria Takes Another $4.1 Billion Charge On Juul Investment
SAN FRANCISCO (CBS SF / CNN) -- E-cigarettes were supposed to help Altria diversify beyond tobacco but its investment in San Francisco-based Juul has turned into a recurring nightmare.
Altria, which sells the Marlboro, Virginia Slims and Parliament brands of cigarettes in the United States, announced Thursday that it was taking a $4.1 billion charge related to its Juul investment. It cited "the increased number of legal cases pending against Juul and the expectation that the number of legal cases against Juul will continue to increase."
Altria added that since the end of October, the number of pending lawsuits against Juul is up more than 80%.
Last week, the Acalanes Union High School District and the Campbell Union High School District became the latest Bay Area school districts taking legal action against the e-cigarette maker.
The news comes just a few months after Altria said it was taking a $4.5 billion writedown on its Juul stake.
As a result of the $8.6 billion in charges since October, the value of Altria's stake in Juul is now worth only $4.2 billion. That is a staggering 67% decline from the $12.8 billion that Altria paid in 2018 for a 35% piece of Juul.
Shares of Altria were down nearly 1% in early trading Thursday. The company also said that sales for the fourth quarter were slightly lower than expected. Altria's shares are up just 9% in the past year, lagging the gains of the broader market. And the stock has tumbled nearly 30% in the past three years.
Altria abandoned a plan last year to reunite with Philip Morris, the international tobacco giant that Altria spun off in 2008.
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