What happened

Shares of Altria (NYSE:MO) were down 16.8% in 2020 despite the coronavirus pandemic forcing everyone to stay at home for large swaths of the year when they theoretically could have smoked more.

So what

While the COVID-19 outbreak did lead to better industry performance, resulting in Altria revising its full-year forecast for fiscal 2021 to see volumes fall just 1.5% compared to its prior estimate of a 2% to 3.5% decline, it still means the industry is continuing its secular contraction.

Hand crushing cigarette in ashtray

Image source: Getty Images.

While the rollout of the reduced-risk IQOS heat-not-burn cigarette from Philip Morris International (NYSE:PM) had investors hopeful for large sales gains, Altria's investment in electronic cigarette leader Juul Labs was going up in smoke.

Altria wrote off ever greater amounts of its investment so that the tobacco giant's original $12.8 billion investment is today worth just $1.6 billion. The owner of the Marlboro brand also had to write down its investment in marijuana producer Cronos (NASDAQ:CRON), saying that its previous $1 billion carrying value was now worth 20% less. 

MO Chart

MO data by YCharts

Now what

Altria still has significant opportunity before it as consumers who smoke willingly accept price increases on cigarettes, giving it a stable revenue stream. The IQOS continues its national rollout as an FDA-approved e-cig, and even with all of its troubles, Juul remains the market leader, and Altria may one day rule how it's run.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.