Lorillard Reports Strong Q1 Earnings

reported its first quarter results Friday afternoon. The company earned $0.82 per share, better than the $0.77 per share analysts were expecting. Revenue of $1.67 billion was also better than the $1.18 billion analysts were projecting, while GAAP net income improved to $487 million from $472 million in the same quarter a year ago. Lorillard noted that its retail market share of cigarettes for the first quarter rose 0.3 percent from last year to 15.5 percent, while the Newport brand held a 13.3 percent market share, also improving by 0.3 percent over the same time period. Gains in Newport's market share was attributed to the continued strengthening of Newport Menthol in its core geographies, continued success in expansion markets and the volume impact from the growth of Newport Non-Menthol. Total cigarette net sales rose 6.4 percent to $1.640 billion from $1.541 billion a year ago. The rise in sales was attributed to a higher average net cigarette selling price and higher cigarette unit sales volume. Electronic Cigarette sales dipped to $28 million from $51 million a year ago, reflecting a decrease in unit volume, partly offset by the launch of the blu PLUS+ product line in addition to increasing competition from rivals that were accompanied with aggressive promotional programs. "During the first quarter, Lorillard continued its strong momentum from 2014 by once again delivering industry-leading cigarette operating profit growth and record high retail market shares," said Murray S. Kessler, Lorillard Chairman, President and CEO. "Increased unit volumes, robust pricing realization and continued tight cost controls in our Cigarettes segment drove double-digit increases in first quarter adjusted operating income and EPS. Notably, these outstanding results were achieved despite continued domestic and international investments in our Electronic Cigarettes category and without the benefit of ongoing share repurchases, which were discontinued as a result of our pending acquisition." The company still expects to close the merger with

in the first half of 2015. Shares of Lorillard were recently trading higher by 0.38 percent at $70.82.