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S&P 500 (NYSE:SPY) component Lorillard (NYSE:LO) will unveil its latest earnings on Wednesday, July 25, 2012. Lorillard manufactures and sells cigarettes and tobacco under the brand names of Newport, Kent, True, Maverick, and Old Gold.
Lorillard Earnings Preview Cheat Sheet
Wall St. Earnings Expectations: The average estimate of analysts is for net income of $2.32 per share, a rise of 13.2% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved up from $2.31. Between one and three months ago, the average estimate moved up. It has been unchanged at $2.32 during the last month. For the year, analysts are projecting profit of $8.72 per share, a rise of 10.7% from last year.
Past Earnings Performance: Last quarter, the company fell short of estimates by 24 cents, coming in at net income of $1.74 per share against a mean estimate of profit of $1.99. The company topped expectations in the fourth quarter of the last fiscal year.
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Stock Price Performance: Between May 22, 2012 and July 19, 2012, the stock price had risen $12.88 (10.3%), from $125.25 to $138.13. The stock price saw one of its best stretches over the last year between January 31, 2012 and February 9, 2012, when shares rose for eight straight days, increasing 15.8% (+$16.98) over that span. It saw one of its worst periods between May 24, 2012 and June 1, 2012 when shares fell for six straight days, dropping 6.4% (-$8.20) over that span.
A Look Back: In the first quarter, profit fell 10.1% to $223 million ($1.70 a share) from $248 million ($1.71 a share) the year earlier, missing analyst expectations. Revenue fell 0.6% to $1.53 billion from $1.53 billion.
Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.46 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 1.73 in the fourth quarter of the last fiscal year to the last quarter driven in part by an increase in liabilities. Current liabilities increased 34.1% to $1.99 billion while assets rose 13.5% to $2.91 billion.
On the top line, the company is looking to get back on the right track after last quarter’s drop snapped a string of revenue increases. Revenue rose 11.3% in the second quarter of the last fiscal year, 3.5% in the third quarter of the last fiscal year and 8.8%in the fourth quarter of the last fiscal year before dropping in the first quarter.
The company is hoping to rebound with this earnings release after a net income drop last quarter. Net income rose 19.7% in the fourth quarter of the last fiscal year before dropping in the first quarter.
Wall St. Revenue Expectations: Analysts predict a rise of 7.8% in revenue from the year-earlier quarter to $1.25 billion.
Analyst Ratings: There are mostly holds on the stock with six of nine analysts surveyed giving that rating.
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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)
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