RICHMOND, Va. - Altria Group , Inc. (NYSE: NYSE:MO) and its e-vapor subsidiary NJOY are challenging an initial determination by a U.S. International Trade Commission (ITC) Administrative Law Judge (ALJ). The judge's preliminary decision supports allegations by JUUL Labs, Inc. that NJOY infringed on its patents and recommends an exclusion order to block NJOY ACE products from entering the United States.
NJOY, disagreeing with the judge's initial determination, intends to present its case to the full ITC, expecting a final decision by December 23, 2024. This development follows NJOY's own patent infringement complaint against JUUL filed in August 2023, with an initial determination anticipated in late September 2024. Even if NJOY prevails in its case, it may not prevent the exclusion order against its ACE product.
In response to the legal dispute, both parties are in mediation to seek a resolution. Furthermore, NJOY has filed for Substantial Equivalence (SE) Exemption requests with the FDA for a modified version of ACE, which they believe circumvents the majority of JUUL's patent claims.
ACE is notably the first pod-based e-vapor product and the only such menthol product approved by the FDA as appropriate for public health. An exclusion order would significantly reduce the FDA-authorized options available to adult consumers.
Altria's portfolio includes brands like Marlboro®, Black & Mild®, and Copenhagen®. It holds a majority stake in Horizon Innovations LLC for the U.S. marketing of heated tobacco products and equity investments in Anheuser-Busch InBev and Cronos Group (NASDAQ:CRON).
The dispute and the ongoing legal proceedings are subject to uncertainties and the outcome is unpredictable. Altria has cautioned that actual results could differ materially due to various risks, including litigation and regulatory review timelines and outcomes.
The information in this article is based on a press release statement.
"In other recent news, Altria Group, Inc. has increased its quarterly dividend by 4.1% to $1.02 per share, up from the previous $0.98. This move is part of Altria's ongoing strategy to grow the dividend per share by mid-single digits annually through 2028, demonstrating the company's commitment to enhancing shareholder value. Additionally, Altria reported a stable adjusted diluted earnings per share (EPS) for the second quarter of 2024, despite a slight decline for the first half of the year.
In terms of product development, Altria has expanded its smoke-free portfolio with new products such as on! PLUS, showing growth and market share gains despite challenges from the illicit e-vapor market. The company has also adjusted its full-year 2024 guidance for adjusted diluted EPS to a range of $5.07 to $5.15.
Stifel reaffirmed its Buy rating for Altria, citing the company's strong dividend payments, effective free cash flow generation, share repurchase programs, and steady EPS growth outlook as key factors. Altria's ongoing commitment to maintaining a strong balance sheet and an investment-grade credit rating was also noted. These are the recent developments in Altria Group's business activities."
InvestingPro Insights
As Altria Group, Inc. (NYSE: MO) navigates through its legal challenges with NJOY, investors are closely monitoring the company's financial health and market position. With a stable market capitalization of $89.94 billion and a robust gross profit margin of 69.56% for the last twelve months as of Q2 2024, Altria's financial fundamentals remain strong.
InvestingPro data highlights a noteworthy P/E ratio of 9.12, suggesting that the company is trading at a low earnings multiple, which may appeal to value investors. Additionally, Altria's dividend yield stands at an attractive 7.74%, complemented by a dividend growth of 8.51% in the same period, underscoring the company's commitment to returning value to shareholders. This is further evidenced by the InvestingPro Tip that Altria has maintained dividend payments for 54 consecutive years, making it a potentially reliable income stock.
One of the InvestingPro Tips worth noting is that management has been aggressively buying back shares, which could indicate a strong belief in the company's value and future prospects. For investors seeking detailed analyses and additional insights, InvestingPro offers a comprehensive list of 20 tips, including advanced metrics and expert opinions, available at: https://www.investing.com/pro/MO.
While the legal outcome with NJOY remains uncertain, Altria's financial stability and shareholder-friendly actions may provide some reassurance to investors during these turbulent times.
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