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March 15, 2013
10:25 EDTLOLorillard expects to receive at least $198M in credits from MSA claims
Lorillard Tobacco Company, a wholly-owned subsidiary of Lorillard, along with other participating manufacturers agreed in December 2012 to settle with 17 states and the District of Columbia and Puerto Rico disputes under the 1998 Master Settlement Agreement, or MSA, involving payment adjustments relating to nonparticipating manufacturers. The settlement has been under consideration by the arbitration panel presiding over the pending arbitration relating to the disputes. On March 13, the arbitration panel issued a Stipulated Partial Settlement and Award, which directs the Internal Auditor under the MSA to implement the settlement provisions involved, thereby allowing the settlement to proceed. The settlement would resolve the claims for the years 2003-2012 and would put in place a new method for calculating this adjustment beginning in 2013. Under the terms of the settlement, Lorillard and other manufacturers will receive credits against their future MSA payments over the next five years, and the signatory states will be entitled to receive their allocable share of the amounts currently being held in escrow resulting from these disputes. Lorillard currently expects to receive credits over the next five years of at least $198M on its outstanding claims, with the majority of the credits occurring in April 2013 and the remainder over the following four years. This estimate is subject to change depending upon a number of factors included in the calculation of the credit. The arbitration proceeding will continue as to those states that have not settled. A number of states that have not joined the settlement have indicated that they intend to take action in state court to prevent the settlement from proceeding or to seek other relief related to the settlement. There is no assurance that such attempts will be resolved favorably to the company.
News For LO From The Last 14 Days
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January 30, 2015
10:18 EDTLOOptions with increasing implied volatility
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January 29, 2015
14:40 EDTLOEarnings Preview: Analysts optimistic on Altria Group ahead of results
Altria Group (MO) is expected to report fourth quarter earnings before the market opens on Friday, January 30, with a conference call scheduled for 9:00 am ET. Altria Group is a holding company whose segments include smokeable tobacco products, smokeless tobacco products and wine. EXPECTATIONS: Analysts are looking for earnings per share of 67c on revenue of $4.53B, according to First Call. The consensus range for EPS is 64c-68c on revenue of $4.47B-$4.6B. LAST QUARTER: Altria reported higher than expected third quarter profit and revenue, and reaffirmed its fiscal 2014 adjusted EPS view of $2.54-$2.59, against consensus at the time of $2.57. The company said it expects stronger adjusted diluted EPS growth in the fourth quarter as compared to the first three quarters in 2014, driven by several factors, including a significantly lower fourth-quarter effective tax rate on operations compared to the fourth quarter of 2013 resulting from Altria’s 2013 debt tender offer, and lower fourth-quarter costs in the smokeable products segment due to the end of the federal tobacco quota buy-out payments. STREET RESEARCH: Earlier in January, Nomura upgraded Altria to Buy from Neutral saying it believes the Reynolds (RAI) acquisition of Lorillard (LO) will likely be approved, in some form, and result in better industry pricing, which will benefit Altria. As part of the upgrade, the firm raised Altria's price target to $56 from $45. Additionally, Wells Fargo upgraded Altria to Outperform from Market Perform, calling the U.S. Tobacco sector the "place to be" in consumer staples in 2015. Wells upgraded Altria Group with an increased price target range of $56-$58. PRICE ACTION: Altria shares are up about 14% over the last three months, and are up fractionally to $54.24 in afternoon trading ahead of the company's Q4 report Friday morning.
10:58 EDTLOOptions with increasing implied volatility
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09:21 EDTLOCalifornia regulators call for e-cigarette restrictions, CNBC says
The California Department of Public Health declared Wednesday that electronic cigarettes are a health threat that should be regulated, says CNBC, citing the department's health report. The report claims e-cigarettes cause nicotine addiction and emit carcinogens, and the department is calling for "protections" against accidental nicotine ingestion, funds for an education campaign, and regulations on the sale and marketing of the product. Publicly traded companies in the space include Lorillard (LO), Reynolds American (RAI), Altria (MO), Vector (VGR), and Philip Morris (PM). Reference Link
January 28, 2015
10:19 EDTLOLorillard investors approve combination with Reynolds American
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09:37 EDTLOReynolds American approves share issuances in connection with Lorillard deal
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January 25, 2015
17:53 EDTLOWorries persist on Reynolds-Lorillard deal getting FTC approval, WSJ says
Shareholders are expected to approve the combination of tobacco companies Reynolds-American (RAI) and Lorillard (LO) this week but the real concern for the deal that will result in a formidable competitor to rival Marlboro maker and market leader Altria Group (MO) is whether the FTC approves of the deal, says the Wall Street Journal. British American Tobacco (BTI), which owns 42% of Reynolds, agreed to vote for the deal which will make the third party to the deal, Imperial Tobacco Group (ITYBY), the No. 3 player in the U.S.,as Imperial agreed to pay $7B for Reynolds’ Winston, Salem and Kool brands and Lorillard’s Maverick cigarette and Blu e-cigarette brands, added the Wall Street Journal report. Reference Link
January 21, 2015
09:37 EDTLOLorillard to host special shareholder meeting
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January 20, 2015
10:44 EDTLOWells sees tobacco stocks as 'place to be' for 2015
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07:21 EDTLOWells Fargo calls Tobacco 'place to be,' upgrades Altria Group
Wells Fargo calls the U.S. Tobacco sector the "place to be" in consumer staples in 2015. Wells lists positive catalysts for the group as stronger pricing power, protection from currency risk and upside potential from e-cigarettes. The firm says Reynolds American (RAI) remains its top pick and it raised its price target range for shares to $79-$81 from $69-$71. Wells upgraded Altria Group (MO) to Outperform from Market Perform with an increased price target range of $56-$58. The firm also has an Outperform rating on Lorillard (LO). Wells has a "high conviction" that Reynolds' deal with Lorillard will be approved by the FTC in March or April.

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