In January 2019, Altria, one of the world’s tobacco giants, had signed a deal with Juul, the e-cig manufacturer who had claimed its goal was making cigarette smoking obsolete. The 35% stake in Juul had cost Altria almost $13 billion and analysts and investors had expressed concerns that the tobacco giant had paid too much, especially given all the scrutiny and lawsuits that the e-cig manufacturer is facing.

Altria said this action was partly based on the fact that the FDA may ban flavoured vaping products, adding that however there was “no single determinative event or factor” in the decision to cut the stake.

Subsequently, in response to the recent events which have led to Juul having to restructure and cut hundreds of jobs, Altria has announced that it is planning to lower its 35% stake in Juul Labs by $4.5 billion. In a regulatory filing, the tobacco company cited the seemingly imminent risk that the FDA would ban flavoured vaping products, adding that there was “no single determinative event or factor” in the decision to cut the stake.

The tobacco giant’s second quarter targets were not reached

Meanwhile, when Altria Group Inc. (NYSE: MO) released its second quarter earnings last August, the figures indicated that despite the fact that the reported revenue exceeded Wall Street expectations, the adjusted earnings still fell short. The tobacco giant had attributed this drop to the decline in cigarette sales, which is thankfully occurring in most developed countries.

“According to Refinitiv analysts, the Company reported earnings per share of USD 1.10, adjusted vs. earnings per share of USD 1.11, and expected a revenue of USD 5.19 Billion vs. an estimated revenue of USD 5.09 Billion,” reported an article on Financial Buzz. The piece added that Altria also bought 3.7 million of its shares, completing a USD 2 Billion buyback, and its directors authorized a new USD 1 Billion buyback.

Read Further: CBS News

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