Altria Reduces Value of Its Investment in JUUL
After the U.S. Food and Drug Administration moved to remove the vaping company from the U.S. market, Altria reduced the value of its investment in Juul Labs by about 70%, to $1.3 billion. Altria’s stake, originally acquired for $12.8 billion in 2018, is n
After the U.S. Food and Drug Administration decided to withdraw this e-cigarette company from the U.S. market, Altria Group reduced the value of its investment in Juul Labs by about 70%, to $1.3 billion.
The shares that Altria acquired for $12.8 billion in 2018 are now valued at $450 million—below the level that would allow Altria to exit the non-compete agreement and launch its own e-cigarettes. During a conference call with analysts and reporters on July 28, Altria stated that it has chosen not to terminate the agreement, as the arrangement remains beneficial for Altria.
On June 23, the FDA ordered Juul Labs to remove its e-cigarettes from U.S. stores, stating that the evidence submitted by the e-cigarette manufacturer was insufficient to demonstrate that they "are appropriate for the protection of public health".
A federal appeals court subsequently granted Juul Labs an emergency stay order to allow judges time to assess the case of Juul's appeal. The e-cigarette company requested the FDA to maintain its order during the appeal.
In court documents submitted last month, Juul stated that the FDA ignored over 6,000 pages of data regarding aerosol inhalation submitted by the company.
On July 5, the FDA temporarily halted the ban on Juul Labs products, stating that the Juul application presents unique scientific issues that require additional review.
The agency emphasized that when e-cigarette manufacturers appeal the agency's decisions, the stay does not revoke the marketing denial order.
Altria's revenue fell 4.1% to $12.44 billion in the first half of 2022, due to high inflation leading consumers to reduce cigarette purchases or switch from premium brands to discount brands.
Despite the challenges, Altria CEO Billy Gifford expressed satisfaction with the results.
"Our tobacco business performed well in a challenging macroeconomic environment in the first half of this year," he said in a statement. "Behind the resilience of Marlboro, the smokeable products segment brought robust revenue growth to the operating company, while our moist smokeless tobacco brands continued to drive profitability.
"Our financial plan for this year remains on track, and we reaffirm our guidance for adjusted diluted earnings per share for the full year 2022 to be between $4.79 and $4.93."
The shares that Altria acquired for $12.8 billion in 2018 are now valued at $450 million—below the level that would allow Altria to exit the non-compete agreement and launch its own e-cigarettes. During a conference call with analysts and reporters on July 28, Altria stated that it has chosen not to terminate the agreement, as the arrangement remains beneficial for Altria.
On June 23, the FDA ordered Juul Labs to remove its e-cigarettes from U.S. stores, stating that the evidence submitted by the e-cigarette manufacturer was insufficient to demonstrate that they "are appropriate for the protection of public health".
A federal appeals court subsequently granted Juul Labs an emergency stay order to allow judges time to assess the case of Juul's appeal. The e-cigarette company requested the FDA to maintain its order during the appeal.
In court documents submitted last month, Juul stated that the FDA ignored over 6,000 pages of data regarding aerosol inhalation submitted by the company.
On July 5, the FDA temporarily halted the ban on Juul Labs products, stating that the Juul application presents unique scientific issues that require additional review.
The agency emphasized that when e-cigarette manufacturers appeal the agency's decisions, the stay does not revoke the marketing denial order.
Altria's revenue fell 4.1% to $12.44 billion in the first half of 2022, due to high inflation leading consumers to reduce cigarette purchases or switch from premium brands to discount brands.
Despite the challenges, Altria CEO Billy Gifford expressed satisfaction with the results.
"Our tobacco business performed well in a challenging macroeconomic environment in the first half of this year," he said in a statement. "Behind the resilience of Marlboro, the smokeable products segment brought robust revenue growth to the operating company, while our moist smokeless tobacco brands continued to drive profitability.
"Our financial plan for this year remains on track, and we reaffirm our guidance for adjusted diluted earnings per share for the full year 2022 to be between $4.79 and $4.93."
