The Wall Street Journal reported July 17 that while it appears the industry might be in danger of bankruptcy, the industry's legal prospects are probably much better now than in the early 1990s, when disclosure of thousands of internal corporate documents resulted in numerous cigarette lawsuits.

The industry is hoping for a reversal of the Florida verdict or a reduction in the amount. But if neither happens and the industry has to pay a multibillion-dollar award, it is expected cigarette makers would be able to manage it with payments stretched out over many years.

The money to pay the lawsuit, said William Pecoriello, an analyst with Sanford C. Bernstein & Co., could come from more price increases in cigarettes. "Gradually, over the long run, I believe you can have cigarettes selling at $5, $6, $7 a pack."

With all things taken into consideration, David J. Adelman, an analyst at Morgan Stanley Dean Witter & Co., said the tobacco industry's overall outlook "has materially improved over the last 18 months."

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