July 25 (Reuters) - Lorillard Inc posted a steeper-than-expected decline in second-quarter profit on Wednesday as it sold fewer cigarettes, pushing its shares down as much as 7.5 percent.
The maker of Newport cigarettes said it had earned $284 million, or $2.17 per share, down from $291 million, or $2.05 per share, a year earlier, when it had more shares outstanding.
Excluding special items, earnings fell to $287 million, or $2.19 per share, from $291 million, or $2.05 per share.
Analysts on average expected Lorillard to earn $2.32 per share, according to Thomson Reuters I/B/E/S.
The total volume of Newport cigarettes sold fell 1.8 percent in the quarter, while U.S. volume dropped 2 percent.
Lorillard’s margins remain under pressure, said Wells Fargo analyst Bonnie Herzog, who rates the stock “market perform.”
Sales rose 2.3 percent to $1.73 billion, as higher prices offset a decline of more than 1 percent in total volume.
Lorillard stood by its goal of increasing shareholder return, which includes earnings-per-share growth and its dividend yield, at a double-digit percentage rate in 2012.
Shares of Lorillard were down 4.9 percent at $128.56 after sliding to $125.14 in morning trading on the New York Stock Exchange.
Reporting by Jessica Wohl in Chicago; Editing by Lisa Von Ahn