Summary: Altria announced yesterday that it plans to finally sell off its majority stake in Kraft foods. The company will finalize and announce this decision at the end of January. Investors and analysts are pleased with the news, especially since this "restructuring plan" was delayed following the light cigarette class action lawsuit decisions in September. This latest lawsuit and others like it over the past few years have been a major factor in the postponement of this move. Previously, Altria did not want look as if it was shifting assets in an attempt to evade plaintiffs' claims. The spin-off news comes on the heels of the company's Q3 earnings report, which revealed that the company's profits slipped almost a percentage point. Altria pins these results on poor international sales and restructuring costs. Chief Executive Louis Camilleri stated that despite this quarter's less than stellar performance, the company expected to meet its annual financial targets. Altria in fact raised its guidance for the year, yesterday, in addition to its restructuring news and earnings report.
Related links: Reynolds American Reports Smokin' Profits; Altria's Earnings Slip • Kraft Spinoff Goes Up in Smoke • Light Cigarette Suit Could Exact a Heavy Price on Tobacco Companies • The Tobacco Empire Strikes Back • MarketWatch.com: Altria board ready to go ahead with Kraft spinoff
Potentially impacted stocks and ETFs: Stocks: Altria (MO), Kraft Foods (KFT), Reynolds American (RAI), Carolina Group (CG), Loews Corporation (LTR) • ETFs: WISDOMTREE H-Y EQ TR (DHS), MORNINGSTAR DV (FDL), ISHARES DOW SEL DIV (DVY)
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