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(Reuters) -Tobacco company Altria on Tuesday beat first-quarter profit estimates but flagged an $873 million impairment at its e-cigarette business, where shipments dropped 70% amid a patent dispute.
Rising demand for its smoking alternatives, such as on! nicotine pouches and NJOY vapes, helped the company counter the impact from lost cigarette sales as smokers shift away from traditional tobacco products.
However, its efforts to transition revenues away from tobacco have been fraught, with the latest setback being a block on the imports of its NJOY ACE vapes as part of a patent dispute with e-cigarette rival Juul Labs.
Altria, which also makes Marlboro cigarettes, said it booked the hefty non-cash impairment on its e-cigarette division as a result and that shipments of the device had dropped after it stopped importing NJOY ACE on March 24.
The company said its full-year forecast assumes that NJOY will not return to the U.S. market this year.
The impairment dragged reported diluted earnings per share down almost 48% for the first quarter.
However, the company's adjusted quarterly profit came in at $1.23 per share, beating analysts' average estimate of $1.19 per share, according to data compiled by LSEG.
Altria expects a 2% to 5% increase in its adjusted earnings per share for the full year, representing a range of $5.30 to $5.45 per share, compared with the rebased figures for 2024.
Net revenue for the quarter ended March 31 fell 5.7% to $5.26 billion, topping estimates of $4.60 billion.
Quarterly shipment volume for cigarettes in the smokeable products segment fell 13.7%, compared with a 10% decline a year ago.
The shipment volume for on! nicotine pouches rose 18% for the first quarter.
Shares of the company were down about 2% in premarket trading.
(Reporting by Neil J Kanatt in Bengaluru and Emma Rumney in London; Editing by Shreya Biswas)