Lorillard Earnings: Falls Short of Wall Street Profit Estimate

S&P 500 (NYSE:SPY) component Lorillard Inc. (NYSE:LO) reported its results for the third quarter. Lorillard manufactures and sells cigarettes and tobacco under the brand names of Newport, Kent, True, Maverick, and Old Gold.

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Lorillard Inc. Earnings Cheat Sheet

Results: Net income for Lorillard Inc. rose to $283 million ($2.16 per share) vs. $267 million ($1.94 per share) in the same quarter a year earlier. This marks a rise of 6% from the year-earlier quarter.

Revenue: Rose 2.4% to $1.66 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Lorillard Inc. reported adjusted net income of $2.17 per share. By that measure, the company fell short of mean estimate of $2.24 per share. It beat the average revenue estimate of $1.25 billion.

Quoting Management: “Lorillard once again strengthened its position in the U.S. cigarette market during the third quarter as it grew market share, sales, margins and average net pricing, all of which translated to strong EPS growth over last year. Notably, the Company expanded its share leadership position in the menthol cigarette segment during the quarter despite intense competitive menthol promotional and new product activity demonstrating the remarkable strength of its flagship brand, Newport. The Company also continued to execute against its strategic plan as it began to invest in advertising, distribution and merchandising on blu eCigs, the leading e-cigarette brand acquired earlier this year,” said Murray S. Kessler, Chairman, CEO and President.

Key Stats:

The company has now fallen short of analyst estimates for the last three quarters. It missed the mark by 13 cents in the second quarter and by 25 cents in the first quarter.

The profit increase last quarter interrupts a two-quarter year-over-year profit decreases. In the second quarter, net income fell 2.4% while the figure dropped in the first quarter.

The company’s revenue has now risen for two quarters in a row. In the second quarter, revenue increased 2.3% to $1.73 billion from the year-earlier quarter.

Looking Forward: Over the last 30 days, analysts have not been optimistic about the company’s next-quarter performance. The average estimate for the fourth quarter is now $2.37 per share, down from $2.38. The average estimate for the fiscal year is $8.54 per share, down from $8.61 ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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