Lorillard Q3 Profit Declines, Adj. Earnings Top Estimates - Update

(RTTNews) - US cigarette maker Lorillard, Inc. (LO) Wednesday reported a decline in third-quarter profit, reflecting higher expenses, despite 10 percent growth in sales. Adjusted earnings topped analysts' estimates.

The company said increase in adjusted earnings was mainly due to strong operating performance of Cigarettes segment, the impact of share repurchases and continued growth in the Electronic Cigarettes segment.

In the third quarter, Lorillard's net income declined to $258 million or $0.69 per share from $283 million or $0.72 per share in the previous year.

Adjusted earnings for the recent quarter was $0.83 per share. On average, nine analysts polled by Thomson Reuters expected the company to report profit per share of $0.81 for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter increased 10 percent to $1.83 billion from $1.66 billion in the year 2012, due to increases in net sales of cigarettes and electronic cigarettes. Analysts expected revenue of $1.27 billion for the quarter.

In Cigarettes segment, net sales increased 7.1 percent to $1.76 billion. The increase in cigarette net sales resulted primarily from higher cigarette unit sales volume and higher average net cigarette selling prices, the company said.

Electronic Cigarettes segment net sales were $63 million, compared to $14 million last year.

Murray Kessler, chairman, president and CEO of the company said, "Lorillard had a strong third quarter of 2013 marked by market share, volume and margin gains for our cigarette business, market share and sequential volume gains for our market leading e-cigarette business and the acquisition of a small UK e-cigarette business."

Selling, general and administrative expenses advanced to $211 million from $122 million in the preceding year.

During the quarter, Lorillard repurchased 5.7 million shares, at a cost of $249 million.

LO is currently trading at $48.85, up 0.21 percent.