Universal's Nine-Month Income Increased

Source from:  Tobacco Reporter 02/09/2010

Universal Corp's net income for the nine months ended December 31, at $142.0 million, or $4.78 per diluted share, was 22 per cent up on that of last year: $116.0 million, or $3.78 per diluted share. George C. Freeman, III, chairman, president, and CEO, said that the current year's results had benefited from a reduction in currency-related costs, partially offset by delays in shipments from Africa and North America. Those shipment delays had caused also a three per cent reduction in revenues for the nine months and had contributed to a modest decline in third quarter revenues. For the third quarter of fiscal year 2010, net income was about $45.7 million, or $1.54 per diluted share, down from $53.1 million or $1.78 per diluted share. Revenues for the quarter of about $661 million were down by five per cent. "Our operations continue to perform well as we look at them over the crop cycle," said Freeman. "Timing differences are a normal part of our business whether caused by farmer deliveries that affect inventory levels or by shipments that affect both inventory and income recognition. This year is no exception as both North American and African shipments have been delayed. We currently expect the shipments to be substantially completed by our fiscal year end. "We are benefiting from continued cost controls and global co-ordination, and we are pleased with our performance so far this year. "Looking ahead to crops that will be sold in fiscal year 2011, Brazilian crops are now expected to be lower than originally estimated because of excess rainfall, while dry conditions have reduced the Malawi Burley crop. However, these changes should not have a substantial effect on worldwide production. "In recent months, some of our customers have announced that the combined impact of increased excise taxes and the recessionary economy has reduced demand somewhat for tobacco products in more developed markets. Although such decreases could shift future demand for some types of leaf, we expect the overall export markets will remain largely in balance because export production appears stable and worldwide uncommitted dealer inventories remain near historical December lows." Enditem