Lorillard Sees Smokin' Q1 Profits

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Lorillard Sees Smokin' Q1 Profits

GREENSBORO, N.C. –Tobacco company Lorillard Inc. saw its first-quarter profit rise 5.7 percent, as retails were higher and costs lower, according to an Associated Press report.

The makers of Newport cigarettes saw its profit grow to $184 million, or $1.09 per share, in the three months ended March 31, up from $174 million, or $1 a share, a year ago, according to the report.

Sales fell less than 1 percent to $917 million on lower volumes, which were partially offset by higher prices. Sales were down from $921 million a year ago.

However, the latest profit was below the $1.15-per-share analysts surveyed by Thomson Reuters expected, while sales topped the $865.4 million estimates. The earnings estimates typically exclude one-time items.

"We are pleased with our results for the quarter despite the extraordinary inventory adjustments that occurred related to the Federal Excise Tax increase and the impact of the current macroeconomic pressures," Chief Executive Martin Orlowsky said in a statement.

Volume was held back by tobacco retailers and wholesalers who cut their orders ahead of a one-time federal tax on their inventory, the report noted. Tobacco sellers paid a floor tax of 62 cents per pack on whatever they had on hand before a 62-cent-per-pack retail sales tax went into effect April 1.

For the quarter, Lorillard said it saw a 7.6 percent decrease in its wholesale shipment volumes to 7.909 billion cigarettes, with declines of 10.6 percent on its Newport brand.

Still, Newport's retail market share increased 0.2 to 10.1 percent compared with the year-ago period.

Lorillard raised its wholesale prices 71 cents a pack in March. Selling, general and administrative costs declined 9 percent to $91 million in the first quarter, compared with $100 million a year ago when the company incurred a $13 million charge related to the separation from Loews Corp. But Lorillard said lower marketing costs were offset by continuing legal expenses

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