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UPDATE 1-Lorillard profit misses expectations; shares fall
July 25, 2012 / 2:36 PM / in 5 years

UPDATE 1-Lorillard profit misses expectations; shares fall

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

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