Lorillard Earnings: Net Income Keeps Falling

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S&P 500 (NYSE:SPY) component Lorillard Inc. (NYSE:LO) reported its results for the second quarter. Lorillard manufactures and sells cigarettes and tobacco under the brand names of Newport, Kent, True, Maverick, and Old Gold.

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Lorillard Inc. Earnings Cheat Sheet

Results: Net income for Lorillard Inc. fell to $284 million ($2.17 per share) vs. $291 million ($2.05 per share) a year earlier. This is a decline of 2.4% from the year-earlier quarter.

Revenue: Rose 2.3% to $1.73 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Lorillard Inc. reported adjusted net income of $2.19 per share. By that measure, the company fell short of mean estimate of $2.32 per share. It beat the average revenue estimate of $1.25 billion.

Quoting Management: “In a quarter that saw significant competitive activity, Lorillard grew sales and market share without sacrificing gross margin,” said Murray S. Kessler, Chairman, CEO & President. “With strong second half plans in place and a more favorable inventory position, the company reaffirms its 2012 goal of a double digit total shareholder return as measured by EPS growth and the dividend yield.”

Key Stats:

The company’s net income has fallen in each of the last two quarters. In the first quarter, net income fell 10.1% from the year-earlier quarter.

The company has now fallen short of estimates in the last two quarters. In the first quarter, it missed expectations by 25 cents with net income of $1.74 versus a mean estimate of net income of $1.99 per share.

Over the last five quarters, revenue has increased 5.1% on average year-over-year. The biggest increase came in the second quarter of the last fiscal year, when revenue rose 11.3% from the year-earlier quarter.

Looking Forward: The average estimate for the third quarter remains unchanged at $2.25 a share. For the fiscal year, the average estimate has moved down from $8.95 a share to $8.72 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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