2Q Shipments Up at Lorillard

Source from:  Tobacco Reporter 07/29/2009

Lorillard's wholesale US shipment volume for the second quarter of 2009, at 9.660 billion, was increased by 2.1 per cent on that of the second quarter of 2008. This increase is said to have reflected the impact of wholesalers and retailers partially restoring inventory levels after depleting them in the first quarter of 2009 to minimize taxes on inventory held at the time of the April 1 increase in federal excise taxes. Nevertheless, total industry wholesale shipments were said to have decreased by an estimated 4.1 per cent between the second quarters of 2008 and 2009. Sales of Newport fell 1.2 per cent to 8.479 billion and, overall, sales of full-price brands dropped 1.6 per cent to 8.650 billion. But sales of Maverick increased by 67.6 per cent to 889 million and total sales of price value brands rose by 49.8 per cent to 1.009 billion. Based on Lorillard's proprietary retail shipment data, Newport increased its domestic retail market share during the second quarter of 2009 by 0.44 share points, from 9.94 per cent during the second quarter of 2008 to 10.38 per cent during the second quarter of 2009. Lorillard's total wholesale shipments, which include those to Puerto Rico, increased by 2.1 per cent to 9.871 billion. Martin Orlowsky, chairman, president and CEO, said the company was pleased to report strong second quarter results despite the impact of the increase of the federal excise tax on April 1 and the overall economic environment, but he said Lorillard remained cautious about unit volumes because of continuing increases in state excise taxes and the longer term effects of the higher federal excise tax. Meanwhile, net sales during the second quarter of 2009, at $1.519 billion, were up by $449 million on those of the second quarter of 2008, but $304 million of that increase was the result of the April 1 increase in federal excise tax. Operating income increased by 29.5 per cent to $456 million, or 44.1 per cent of net sales excluding excise taxes. And net income increased by 31.8 per cent to $286 million, or $1.71 per share (diluted). Enditem