Oregon's state Supreme Court orders Philip Morris to pay state more than half of US$79.5M jury award in case brought by smoker's widow
December 5, 2011
– Oregon's state Supreme Court is ordering Philip Morris USA Inc. to pay the state more than half of a $79.5 million jury award in a case brought by a smoker's widow.
The cigarette maker's parent company, Altria Group Inc., said Friday that it will lower its full-year earnings expectations based on the costs tied to the payments for this and a separate case by a former smoker.
A jury awarded the $79.5 million payment in 1999. Oregon law provides the state is entitled to 60 percent of any punitive damages award.
Phillip Morris argued that the state released its right to collect that money with the company's master settlement agreement in 1998 with 46 states, five U.S. territories and the District of Columbia over claims about smoking. The company has already paid 40 percent of the award to the widow.
Altria said it expects to record a pre-tax charge of $62 million related to judgments in the two cases and $57 million in related interest costs.
As a result, the company expects to earn $1.58 to $1.64 per share for the 2011 fiscal year. It earlier expected to earn $1.60 to $1.66 per share.
Excluding several other one-time items, the company expects to earn $2.01 to $2.07 per share for the year. Analysts polled by FactSet expect Altria to report adjusted earnings of $2.03 per share for the fiscal year.
The company's shares fell 6 cents after hours. They closed Friday at $28.41, down 27 cents.
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