US: Universal Operating Profit Plummets as Volume Declines

Source from:  Tobacco Journal  02/07/2013

Universal Corporation profit plummeted in the three months ending 31 Dec on lower volume and margins in all segments, the company said.

Third quarter segment operating income, comprising profit from tobacco operations, declined 24 per cent, or USD 20 million (EUR 14.8 million) to USD 63 million. Through nine months of Universal's fiscal year, segment operating income rose USD 11 million to USD 186 million, as a slump in the North American home market was offset by stronger performances in other regions. Revenue was stable at USD 1.8 billion.

"We still face challenges for the remainder of the fiscal year," said Chief Executive Officer George Freeman. "We anticipate lower shipments in the fourth quarter. Last year, we began shipping tobacco later compared to the current year, and crops were larger. These factors caused volumes to be skewed toward the second half of last year. Larger volumes of uncommitted inventories were also available for sale last year, and we have sold a significant amount of those stocks. Our uncommitted stocks were only 10 per cent of total inventory at December 31, 2012, and remain at very low levels." (ci) Enditem