Lorillard Q1 Profit Declines - Quick Facts

(RTTNews) - U.S. cigarette maker Lorillard, Inc. (LO) said that income for the first quarter of 2014 declined to $271 million from $328 million in the prior year quarter.

Reported earnings per share for the quarter decreased 14.0% to $0.74 from last year's $0.86, due primarily to the $0.23 per share favorable impact of the settlement to resolve certain MSA payment adjustment disputes on tobacco settlement expense in the first quarter of 2013 which did not recur in the first quarter of 2014.

In addition, reported earnings per share for the first quarter of 2014 include a favorable impact of $0.05 per share on tobacco settlement expense and $0.01 per share on investment income related to the 2003 non-participating manufacturer arbitration award.

Adjusted earnings per share increased 4.5% to $0.69 from the prior year's $0.66, due primarily to the strong operating performance in the Cigarettes segment and the impact of share repurchases. Analysts polled by Thomson Reuters expected the company to report earnings of $0.72 per share for the quarter. Analysts' estimates typically exclude special items.

Adjusted earnings per share exclude the favorable impacts of the settlement to resolve certain MSA payment adjustment disputes in the first quarter of 2013 and the 2003 non-participating manufacturer arbitration award in the first quarter of 2014.

Cigarette net sales increased $21 million, or 1.4%, to $1.541 billion in the first quarter of 2014, compared to $1.520 billion in the first quarter of 2013. The increase in cigarette net sales resulted primarily from higher average net cigarette selling prices, partially offset by lower cigarette unit sales volume.

Net sales increased by $15 million, or 1.0%, to $1.592 billion in the first quarter of 2014 due to a 1.4% increase in net sales of cigarettes. Wall Street expected revenues of $1.19 billion for the quarter.