Altria’s cannabis investment eats into first-quarter earnings, drives profit down 41%. Shares slide

KEY POINTS

  • Altria on Thursday reported first-quarter earnings and revenue that missed analysts’ expectations.
  • Altria’s investment in Cronos ate into the tobacco company’s first-quarter profits.
  • Ratings agencies downgraded Altria after its investments in Cronos and Juul.

Altria’s investment in Canadian cannabis company Cronos ate into the tobacco company’s first-quarter profits, the company said Thursday.

Altria, which sells best-selling cigarette brand Marlboro in the U.S., reported first-quarter net income of $1.12 billion, or 60 cents per share, down 41% from $1.89 billion, or $1 per share a year earlier. Excluding unrealized losses associated with its investment in Cronos and other items, Altria earned 90 cents per share, less than the 92 cents per share expected by analysts surveyed by Refinitiv.

Shares of Altria slid more than 5% in premarket trading Thursday.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

Earnings per share: 90 cents, adjusted, vs. 92 cents expected
Revenue: $4.39 billion vs. $4.59 billion expected
Altria was hit with higher financing costs after issuing fresh debt to finance its $1.8 billion investment in Cronos and $12.8 billion stake in Juul. Two ratings companies cut Altria’s creditworthiness in December following the deals.

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