Category:
Business
Region:
USA
State:
New York
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S&P REVISES TOBACCO COMPANY OUTLOOKS
Source: Houston Chronicle
Aug 21, 2006 -- NEW YORK — Standard & Poor's Ratings Services changed its outlook to "Stable" from "Negative" on Altria Group Inc., Reyolds American Inc. and Loews Corp. after a judge ruled last week that tobacco companies violated federal racketeering laws but did not implement financial penalties.
"The outlook revisions are based on the elimination of a sizable potential legal claim against the major cigarette manufacturers, as well as any near-term bonding requirements for the appeals process," analyst David Kang said in a statement.
The Department of Justice had been looking for $14 billion in remedies from the companies, but Judge Gladys Kessler said she lacked the authority to impose significant penalties due to a prior appeals court ruling.
Shares of Altria, whose Philip Morris subsidiary makes best seller Marlboro, fell 13 cents to $83.84 on the New York Stock Exchange. Reynolds American, maker of Camel and Salem, slipped 17 cents to $64.81 in afternoon trading on the New York Stock Exchange. Loews, whose Carolina Group markets Kent and Newport cigarettes, rose 23 cents to $37.57 on the Big Board.
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