Lorillard’s domestic-market wholesale cigarette shipments during the three months to the end of March, at 8,838 million, were down by 2.3 percent on those of the first quarter of 2013, 9,044 million.
Shipments of Newport were down by 1.5 percent to 7,551 million, while shipments of Kent and True, Lorillard’s other full-price brands, were down by 14.7 percent to 31 million and by 10.5 percent to 35 million, respectively.
In total, full-price brand shipments were down by 1.6 percent to 7,617 million.
Shipments of price/value brands were down by 6.4 percent to 1,221 million, with shipments of Old Gold down by 11.3 percent to 90 million, and those of Maverick down by 6 percent to 1,131 million.
Meanwhile, Lorillard’s shipments to Puerto Rico and U.S. Possessions were down by 33.9 percent to 118 million; so domestic and overseas shipments, taken together, were down by 2.9 percent to 8,956 million.
Lorillard’s share of the U.S. domestic market increased by 0.3 of a percentage point to 15.2 percent, with Newport’s share up by 0.4 of a percentage point to 13 percent.
The menthol cigarette share of the U.S. market increased by 0.6 of a percentage point to 31.8 percent, while Lorillard’s share of the menthol segment was unchanged at 40.7 percent. Newport’s share of the menthol segment was also unchanged at 37.5 percent.
Meanwhile, Lorillard reported also the e-cigarette domestic retail dollar share of blu eCigs, which it bought a year ago for $135 million. Blu’s share, which on March 23, 2013, had stood at 35.3 percent, by March 15, 2014, was 45 percent, after having peaked at 45.8 percent on Dec. 21, 2013, according to Nielsen ScanTrack Database figures.
Lorillard’s net sales during the three months to the end of March, at $1,592 million, were increased by 1 percent on those of the first quarter of 2013, $1,577 million.
Reported operating income was down by 15.9 percent from $561 million to $472 million, while adjusted operating income was up by 2.1 percent from $438 million to $447 million.
Reported net income was down by 17.4 percent from $328 million to $271 million, while adjusted net income was increased by 0.4 percent from $251 million to $252 million.
Reported diluted earnings per share were down by 14 percent from $0.86 to $0.74, while adjusted earnings per share were increased by 4.5 percent from $0.66 to $0.69.
“Lorillard delivered strong underlying fundamental performance and record high cigarette market share results to start the year, despite some unusual events that occurred in the quarter,” said Murray S. Kessler, chairman, president and CEO. “Reduced promotions, a tax increase in Puerto Rico and severe weather affecting our core markets had a disproportionate impact on Lorillard cigarette volume during the quarter.
“The company also continued to incrementally invest in our Blu e-cigarette business. Despite these headwinds and incremental investments, very good pricing realization and continued tight cost controls in our cigarettes segment allowed us to deliver robust adjusted cigarette operating income growth of almost 5 percent in the quarter.
“The ability to grow profits and market share in a quarter with some unusual challenges is yet another demonstration of why we remain confident in our ability to deliver a double-digit shareholder return as measured by EPS growth and the dividend yield over the long term.”
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