Lorillard (NYSE:LO) revealed on Monday a stronger-than-expected 11% increase in second-quarter profit as its newly introduced non-menthol Newport brand excelled and sales trumped rivals.
The Greensboro, N.C.-based cigarette maker, including Newport and Kent brands, booked net income of $291 million, or $2.05 a share, compared with $263 million, or $1.73 a share, in the same quarter last year, beating the Streets view of $2.02 a share.
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Revenue for the three months ended June 30 was $1.69 billion, up 11.3% from $1.52 billion a year ago, ahead of average analyst estimates polled by Thomson Reuters of $1.21 billion.
Lorillard delivered strong second quarter results, despite the difficult macro-economic conditions, the companys chief executive, Murray Kessler, said in a statement. These results continue to demonstrate the fundamental strength of our brands and our organization.
Sales for the third biggest U.S. cigarette company by revenue were lifted by higher average prices and stronger demand, partially offset by increased promotion costs driven by the introduction of Newport Non-Menthol.
Total wholesales shipment volume climbed 9.9% during the period, while industry-wide U.S. cigarettes wholesale shipments declined an estimated 1.3%. Lorillard's two bigger rivals Altria Group (NYSE:MO) and Reynolds American (NYSE:RAI) last week booked weaker profits amid charges.
The company also incurred costs related to the State Settlement Agreements and the Federal Assessment for Tobacco Growers, as well as higher user fees from the U.S. Food and Drug Administration.