Lorillard Rewrites the Record Books

Source from:  Tobacco Reporter 10/27/2010

Lorillard's third quarter domestic wholesale shipments of cigarettes, at 9.830 billion, were up by 5.8 per cent on those of the three months to the end of September 2009. Comparing the same periods, the US' industry-wide domestic wholesale shipments of cigarettes declined by 0.8 per cent. Including shipments to Puerto Rico and US possessions, which increased by 1.4 per cent to 173 million, the company's shipments were up by 5.8 per cent to 10.003 billion. Shipments of Newport rose by 2.9 per cent to 8.248 billion and, overall, shipments of the company's full price brands increased by 2.5 per cent to 8.378 billion. But shipments of Kent were down by 15.2 per cent to 63 million, shipments of True were down 13.1 per cent to 65 million and shipments of Max were down by 46.5 per cent to two million. Shipments of the company's price/value brands were increased by 30.3 per cent to 1.452 billion with shipments of Old Gold up 25.2 per cent to 146 million and shipments of Maverick up 30.9 per cent to 1.306 billion. Meanwhile, Lorillard's domestic wholesale shipments of cigarettes during the nine months to the end of September, at 28.135 billion, were increased by 5.5 per cent on those of the nine months to the end of September 2009. Comparing the same periods, the US' industry-wide domestic wholesale shipments of cigarettes declined by 3.5 per cent. Including shipments to Puerto Rico and US possessions, which were down by 8.6 per cent to 516 million, the company's shipments were up by 5.2 per cent to 28.651 billion. Shipments of Newport increased by 2.6 per cent to 23.953 billion, while overall shipments of full price brands rose by 2.3 per cent to 24.353 billion. But shipments of Kent were down by 14.4 per cent to 193 million, shipments of True were down by 12.2 per cent to 195 million and shipments of Max were down by 21.8 per cent to 11 million. Shipments of price/value brands were increased by 31.8 per cent with shipments of Old Gold up 16.2 per cent to 394 million and shipments of Maverick up 33.9 per cent to 3.388 billion. Lorillard's share of the domestic US market during the nine months to the end of September, at 12.8 per cent, was 1.1 percentage points up on that at the end of the nine months to the end of September 2009. Newport's share of the total market was up by 0.6 of a percentage point to 10.9 per cent, while its share of the industry's menthol segment (about 30 per cent of the total) was up by 1.1 percentage points to 36.3 per cent. Lorillard's net earnings during the three months to the end of September, at $274 million, were 16.6 per cent up on those of the three months to the end of September 2009. Diluted earnings per share at $1.81 were up by 26 per cent, an increase that included the benefit of the company's share repurchase program, which resulted in lower outstanding shares and contributed $0.14 or 9.7 percentage points to the increase. Net sales, at $1.567 billion, were increased by 10.4 per cent and set a record for the company, while operating income increased by 18.6 per cent to $465 million, which was also a record. The improved results were driven by the 5.8 per cent increase in total unit volumes and higher average net selling prices. Net sales during the nine months to the end of September, at $4.446 billion, were up by 15.3 per cent on those of the nine months to the end of September 2009. About half of that increase was the result of the April 2009 increase in federal excise taxes on cigarettes. Net sales excluding excise taxes were up by 10.1 per cent as the result of higher average unit prices, higher net unit sales volume and lower sales promotion costs. "We are delighted to report an outstanding third quarter of 2010 as Lorillard and its flagship brand, Newport, continue to outperform the industry," said Murray S. Kessler, the company's new president and CEO. "Our total portfolio of brands has once again posted record retail market share numbers for the quarter. "I had always admired Lorillard as an outsider and, as a result, had high expectations walking in the door. Those expectations have been significantly exceeded as I have gotten to know the business and the talented people that work at the company. It's a tribute to my predecessor, Marty Orlowsky. He has much to be proud of." Enditem